New Delhi, Commerce and Industry Minister Piyush Goyal on Thursday urged the industry to share specific issues they are facing in accessing bank credit and suggested that the government is open to exploring alternate financing models for MSMEs. He also said the ministry can earmark particular areas in the proposed industrial townships for the MSMEs (Micro, Small, and Medium Enterprises).
Exporters have raised concerns over declining bank credit, particularly to the MSME segment. While exports grew by 15 per cent in the rupee terms between 2021-22 and 2023-24, the outstanding credit in March 2024 dropped by 5 per cent over the same month in 2022, according to exporters.
“Give me specific details (as in) what kinds of problems they (MSMEs) face. Is too much collateral being asked? Suppose an ECGC (Export Credit Guarantee Corporation) cover is available, do they (banks) still ask for collateral, what kind of interest they charge when a 90 per cent guarantee is taken by ECGC in the event of any failure of export credit?
“If we get that more specific feedback then we will be able to take it up with the bankers. ECGC is looking at factor services also but my own personal view is that being costlier, people will still prefer to go to the bank and take a loan but we are open to the idea of alternate financing models,” he said here at a function.
In August, the cabinet approved 12 new project proposals under the National Industrial Corridor Development Programme (NICDP) with an estimated investment of Rs 28,602 crore to set up industrial parks/townships in the country.
These industrial areas will be located at Khurpia in Uttrakhand, Rajpura-Patiala in Punjab, Dighi in, Maharashtra, Palakkad in Kerala, Agra and Prayagraj in UP, Gaya in Bihar, Zaheerabad in Telangana, Orvakal and Kopparthy in AP and Jodhpur-Pali in Rajasthan.
“I am happy to commit to a particular area earmarked for MSMEs because without MSMEs no large industries will survive. If Toyota is investing Rs 20,000 crore in one of our industrial cities at Shendra-Bidkin at Sambhaji Nagar (Maharashtra), clearly they will need 100s of MSMEs in their support ecosystem,” Goyal said.
Further, he expressed “pain” that the industry is not giving feedback on the ministry’s single window system Initiative.
Meanwhile, the union minister criticised the opposition parties alleging that they are trying to divide the society based on caste, religion and language and are creating a fake narrative in the country.
He said that the Modi-government programmes do not discriminate against people based on caste or religion.
“I think the recent election results reflected also a little bit of feeling amongst the people particularly of Uttar Pradesh, Rajasthan, Maharashtra and Haryana that they let down the Prime Minister (Narendra Modi) for all the good that he had done for 10 years,” Goyal said.
In the recent Haryana assembly elections, the BJP clinched a stunning hat-trick win in the state overcoming anti-incumbency and dashing Congress’ hopes of a comeback. The saffron party won 48 of the 90 assembly seats in Haryana, well above the simple majority mark of 46.
Together with its allies Shiv Sena and NCP, the BJP-led Mahayuti coalition has a commanding majority of 230 seats (out of 288). Senior BJP leader Devendra Fadnavis will take oath as the new Maharashtra Chief Minister at a ceremony in Mumbai which will be attended by the Prime Minister.
When asked about Maharashtra, Goyal told reporters “I am happy that Eknath Shinde Ji and Ajit Dada Pawar will be joining Fadnavis Ji as Deputy-Chief Ministers in the government.”
He added that these election results have dismantled the fake narrative and divisive politics of the opposition.
