According to the RBI data, even as the credit outstanding to the MSME sector contracted by 1.4 percent in September, overall bank credit grew 11.3 percent
New Delhi: Walking the talk on its promise to give a fillip to micro, small and medium enterprises (MSMEs), the government has now sought details from all public sector undertakings (PSUs) on the procurement done by them from the MSME sector, especially those owned by women, as had been mandated under an official directive.
All government departments and Central Public Sector Enterprises (CPSEs) were asked to procure at least 25 percent of their goods and services from such enterprises. It had also asked the CPSEs to get on board the Trade Receivables Discounting System (TReDS), a digital platform aimed at addressing the critical financial needs of MSMEs.
Outstanding credit to MSME sector shrinks by 1.4%
According to the Reserve Bank of India data, even as the credit outstanding to the MSME sector contracted by 1.4 percent in September, overall bank credit grew 11.3 percent. The issue of providing more relief to the MSME sector will also be taken up by the government for discussion at the RBI board meeting scheduled on November 19. The government had started discussions on a bunch of issues with the RBI after it invoked Section 7 of the RBI Act.
The MSME support programme: What all is in the pipeline?
Earlier this month, the government had announced a number of sops for the MSME sector as part of a special support programme that included benefits like loans in 59 minutes and 2 percent interest subvention or rebate on incremental loans of up to Rs 1crore for GST-registered MSMEs.
To give a boost to the MSME sector, the government has also amended the Public Procurement Policy and expects to improve market accessibility and enhance the competitiveness of MSMEs. CPSEs have also been asked to provide a minimum 3 percent reservation for businesses owned by women.
The government has asked public sector banks to register themselves on the TReDS platform to enable faster payments to small businesses. It will update udaymitra.in, a web portal where MSMEs can list their projects and banks can compete to finance them.
A drive has also been initiated to put products and services created by the MSME sector on the Government e-Marketplace (GeM), where they can be purchased online by ministries, PSUs and autonomous bodies.
PSU Watch is a business news brand of 27 Frames Communications LLP. It places the spotlight on PSUs, Governance, Bureaucracy, Defence and Public Policy as the sector traverses through a period of radical change.