The importance of the MSME sector cannot be underestimated as it forms the backbone of the industrial landscape of the country, a senior CII functionary has said.
The importance of the MSME sector cannot be underestimated as it forms the backbone of the industrial landscape of the country, a senior CII functionary has said. The contribution of MSMEs in the country’s GDP was 40 per cent in export and 45 per cent in the manufacturing sector, Neeraj Kant, CII chairman, Jamshedpur zonal council, said. Two to three crore MSMEs are operating in the country providing employment to over 10 crore people directly and indirectly, Kant told an ‘Awareness Session on Financing SMEs’, organized by the CII here yesterday.
Elaborating on the difficulties being faced by the MSMEs at present, he said, the biggest concern of this segment was that 90 per cent of it do not have access to capital and organized financial sector though MSMEs provide 25 to 30 per cent of the total 30 crore employment in the country. MSMEs do not have adequate collateral, which is sought by banks when one approaches them for loans, he said. MSMEs in India also rely on private money lenders and the unorganized financial sector for their requirements, he said.
This small pool of funding providers often forces many potentially viable and growth focused MSMEs out of operation, Kant said. However, financial institution have been successful in making inroads and have made successful strides in order to bridge this gap, the CII functionary said. Another concern for the segment was plunging exports, which needed to be addressed urgently, Kant said. Expressing confidence that the MSMEs have broad capability and competitiveness to run businesses, Kant urged industrialists to change their mindset as business today has become extremely scientific, methodical and system-oriented than what it was decades ago.