An alley to escape ‘capital’ punishment

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sector banks would be stakeholders in the rating agency.

The finance minister also delineated a few strategies adopted by the central government to promote the SME sector: doubling the flow of credit to the small industry sector in five years; and enactment of a SME Bill. Currently, a draft of the Bill is under consideration. The Micro, Small and Medium Enterprises Act, 2006 is a legal framework for more capital investment in the SME sector. However, the implementation of the Act would need more precision and investing authority with different agencies.

The way forward would be to create an environment of risk-taking by the government by providing start-up capital to SMEs and to facilitate technology transfers and training in skill development.