The National Commission for Enterprises in Unorganised Sector (NCEUS), headed by Arjun Sengupta, has raised the pitch for the government to accept its proposal to set up a statutory fund for providing easy credit access to entrepreneurs in the unorganised sector. Sengupta said he was hopeful of an early acceptance of his report by the government.

The report, which has been submitted to Prime Minister Manmohan Singh, calls for constitution of a National Fund for the Unorganised Sector (NAFUS) with a paid-up capital of Rs 1,000 crore on the lines of Nabard and Sidbi to provide easy credit access to entrepreneurs.

The commission has also handed over a separate report detailing the status of re-financing availability of credit to the sector.

?The fund proposed by us is envisaged as a statutory body funded by the Central government and financial institutions, which will primarily focus on non-farm micro enterprises with investment less than Rs 5 lakh,? Sengupta said.

The NCEUS chairman said infusion of credit to enterprises in the unorganised sector could create additional employment for 2.2 crore and raise the country?s GDP by 1.3% by the end of the 11th Plan period (2007-2012).

At present, these enterprises account for about 30% of the GDP, over 30% of the exports and provide employment to 10.4 crore.

To step up credit to the unorganised sector, the Commission suggested that micro enterprises are provided credit at an interest rate of 7% on loans up to Rs 5 lakh. It is observed that while large enterprises pay only 6-7% interest, small units are charged 16% for loans above Rs 2 lakh.

Sengupta further suggested that a multi-purpose Swarozgar Credit Card is issued for unorganised sector enterprises.

The money margin support for all government schemes should be pegged at 25% as in the case of rural employment guarantee programme of the UPA government, he added.

To save the lower segment of micro enterprises from undue harassment, he said the limit of loan for action under the Bank Securitisation Act should be raised from Rs 1 lakh to Rs 5 lakh.