Credit and Finance for MSMEs: Chief Economic Advisor V Anantha Nageswaran has said the private sector needs to make investments in technology and research and development, and timely pay the micro, small and medium enterprise (MSME) suppliers to support the nation’s economy, PTI reported on Monday. The CEA stated that while the economy cannot be exempt from the global challenges, it remains resilient and set for a rebound because as the banking system is better, inflationary issues are peaking out and ongoing recovery is in good shape.
He added that India is in a relatively better position and the majority of its sectors are doing quite well despite market volatility and inflation. However, the country’s economy requires continuous vigilance, actions and discipline for policymakers, said Nageswaran at a virtual meeting with the Calcutta Chamber of Commerce.
The CEA highlighted the need to stress R&D and innovation for the long term during the session. “We need to embrace technology. On a global index, we are very low in Research & Development (R&D) spend. Government spending is 52 per cent,” Nageswaran said, urging the private sector to invest more. The rebound in capital goods companies’ order books is an indication that the investment cycle will pick up, assured CEA.
Nageswaran in June this year as well had slammed public and private sector buyers of MSME goods and services for the delay in clearing dues. “There are multiple ‘creative excuses’ used by public and private enterprises to delay supplier payments and hence most micro and small businesses face the problem of getting bank finance at reasonable rates,” he said speaking at the FE Modern BFSI Summit in Mumbai. The CEA strongly urged banks to ‘think about’ how to ensure large businesses clear MSME dues on time.
According to the data from the delayed payment monitoring portal MSME Samadhaan, 30,707 delayed payment cases involving Rs 11,208 crore were currently under consideration by the facilitation councils as of August 9, 2022. On the other hand, 18,807 cases involving Rs 3,442 crore were disposed so far.