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Shaming of Tamils by Tamil farmers at Delhi An inexplicable neglect WTO Meet: resolved to meet again Kinetic Karnataka The Gulf aviation boom Delhi is distant… Build close rapport with business leaders MHC should not return to its old indisciplined ways A welcome initiative by the judiciary Tihar, Puzhal not different from Parappana Agrahara PPP mode for upgrading Corporation Hospitals GM Technology at last! The rise and fall of Annamalai University More Shakthi to Das’ elbow Godspeed, Chief Minister JJ TELANGANA at last…BUT There was flood of milk. Reason: no milk commissioner! Roaring Ro-Ro facility Building loyalty through the stomach Colour-Chem’s colourful KRVS The brown list of Venkitaramanan For whom the bell tolls? Strengthen the base... Plummeting profits of PSBs Paytm karo... Silver Years of Madras Musings SoA @ 80 Nuclear power at the nucleus Contrarian cousins Parliament in paralysis... 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CRS, a jewel among managers, is no more. Scientists urged to take up farmer-oriented research The few handicaps...
 
Funding the un-funded

Noted chartered accountant, columnist and Convenor, Swadeshi Jagran Manch, S Gurumurthy (SG), has been campaigning for the recognition of the contribution of several lakhs of small business units. SG has been referring to the substantial share of micro, small and medium enterprises to the nation’s GDP, employment and exports. In extensive travels to different parts of the country he has been interacting with hundreds of entrepreneurs from these sectors. He has been stressing on their rich contributions despite the severe constraints they face in accessing needed funds on fair terms. SG has been receiving a good deal of support from Prof R Vaidyanathan of IIM-Bangalore. The learned academic has also been passionately advocating the case of micro, small and medium enterprises (MSMEs).

This great work has received notice, redressal and action at the hands of Finance Minister Arun Jaitley. In his budget for 2015-16, Jaitley proposed, “to create a Micro Units Development Re-Finance Agency (MUDRA) Bank with a corpus of Rs 20,000 crore and credit guarantee corpus of Rs 3000 crore. MUDRA Bank will re-finance micro finance institutions through a Pradhan Manthri Mudra Yojana for lending. Priority will be given to SC/ST enterprises. Just as we are banking the un-banked, we are also funding the un-funded.”

Jaitley pointed to the NSSO Survey of 2013 that estimated 5.77 crore small business units, mostly individual proprietorships, which run small manufacturing, trading or services activities. “Only four per cent of such units receive institutional funding. Providing access to institutional finance to such micro/small business units would turn them into strong instrument of GDP growth and also employment,” states a press note from the Ministry of Finance.

The Ministry also proposes changes in priority sector lending (PSL) norms. It estimates total credit extended by banks in PSL at Rs 2,154,356 crore. Changes proposed in PSL include:

  • A separate sub-limit of up to 8 per cent for PSL
  • Loans for agri processing and agri infrastructure to be included in PSL without any limit on the size of loans
  • Loans to medium enterprises included in PSL
  • Loans up to Rs 5 crore for social infrastructure like schools, healthcare, drinking water, sanitation… under PSL for towns of less than one lakh population.
  • Renewable energy sector added to PSL with a limit of Rs 10 crore loan
  • Progress to be monitored quarterly

 

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