The Narendra Modi government has been holding meetings with Asian Development Bank, World Bank, and German state-owned development bank KfW for access to low-cost capital to Indian MSMEs.
The Narendra Modi government has been holding meetings with Asian Development Bank, World Bank, and German state-owned development bank KfW for access to low-cost capital to Indian MSMEs, according to MSME minister Nitin Gadkari. The comments gain significance as lack of capital is the biggest challenge for the growth of MSMEs even as they grapple with the issue of delayed payments from large public sector units and government enterprises that choke their supply of working capital and impact their businesses.
Highlighting MSMEs contribution to the Indian economy, Nitin Gadkari at an event recently to address the roadmap for the growth of MSMEs said that “MSMEs are the backbone of India’s economy as it contributes 40 per cent share to India’s exports, created 11 crore jobs and we have created a mission of creating 4 crores more jobs in five years. MSMEs also contributes 29 per cent to India’s GDP.” The minister also stressed on the huge potential among MSMEs for generating income and employment, eradication of poverty, boosting exports and contributing to economic growth.
The minister announced of generating 50 lakh jobs in the Khadi sector and will focus on developing 115 socio-economic backward regions identified by Prime Minister Modi on behalf of Khadi Gramudyog. “To achieve this, we need to create new channels for funding, make the sector investor-friendly, bring in technological innovations, and reduce logistics cost to make our products competitive, provide adequate skilling and market support,” according to Nitin Gadkari. The minister also called for diversification in the MSME sector to areas such as bamboo, honey production, fisheries, bio-fuel production, Agarbatti making, dairy, etc., for new businesses.
Nitin Gadkari further stressed on the need to reduce imports through technology and innovation while boosting exports while adding that a new policy will soon be announced for this. “In sectors such as medical devices, we have imported goods worth Rs 50,000 crore. We opened a medical devices park in Visakhapatnam (to work on reducing the cost of manufacturing goods) and surprisingly let’s say the MRI machine cost which otherwise is Rs 4.5 crore is being made in only Rs 98 lacs. We are going to create 10 such parks in the country and will focus on adopting technology through joint ventures so that we can produce medical devices at lower costs and boost our exports and generate more employment,” the minister added.