Nitin Gadkari suggests way to boost credit access for micro units; discussions underway with Niti Aayog

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Published: July 27, 2020 3:20 PM

Credit and Finance for MSMEs: MSME Minister Nitin Gadkari suggested having a chartered accountant in every city who will act as an auditor-cum-accountant to regulate or check the annual performance of enterprises and provide grades.

Unless per capita income, GDP, and employment potential won’t increase in rural India, growth won’t be there, said Gadkari.

Credit and Finance for MSMEs: MSME Minister Nitin Gadkari on Monday said there is a need to set-up a social microfinance institution to provide capital support to micro-entrepreneurs and self-employed. Gadkari said that the discussions are underway with Niti Aayog and IITs on this to offer loans up to Rs 10 lakh to entrepreneurs. “Making microfinance available in India is a big requirement that will generate employment and growth,” the minister said in a video conference with members of a CA association — North Indian Chartered Accountant (NICA). Out of 6.33 crore MSMEs in India, over 99 per cent units – 6.30 crore are micro-businesses, as per the MSME Ministry’s FY19 annual report. In terms of ownership, 6.08 lakh (95.98 per cent) enterprises are proprietary firms.

Gadkari suggested having a chartered accountant in every city who will act as an auditor-cum-accountant to regulate or check the annual performance of enterprises and provide grades. This would largely support self-employed individuals engaged in micro-businesses such as operating electric rickshaws, self-help groups, roadside stalls, and shops etc. It will also lead to growth in rural, agriculture, and tribal regions. “There are 115 aspirational districts that are socially, economically, and educationally backward where we should create self-employment. This is the biggest challenge in making India Atmanirbhar,” he added.

Also read: Special resolution framework for MSMEs soon, to have ‘better acceptance’ of genuine failures: IBBI chief

14-16 per cent GDP contribution is from agriculture and allied activities, 22-24 per cent comes from the manufacturing sector and 52-54 is from service sector but population depending on agriculture is 65-70 per cent representing rural India, he said. Hence, “unless per capita income, GDP and employment potential won’t increase in rural India, the average income and growth will not go up.”

Meanwhile, the government had launched a special micro-credit scheme called PM Street Vendor’s Atmanirbhar Nidhi (PM SVANidhi) for street vendors in June this year. More than 2.6 lakh applications have been received and over 64,000 of them have been sanctioned while more than 5,500 have been disbursed, as per a statement by PMO on Saturday. Businesses can access loans of up to Rs 10,000 for 12-month tenure under the scheme.

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