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Auto components surge… Fortune 500 review Infrastructure funding – lessons learnt Editor's Says Banning booze... No engine for this car Parliament in paralysis... An informal presentation - analytical, forward locking... Vibrant Gujarat Solar, solar everywhere … B H Kothari - a tribute Colour-Chem’s colourful KRVS An enemy’s enemy is a friend Intellectual of rare qualities Put expensive assets created to use... IAS invades NDDB... S Ramanathan – a versatile musician, musicologist The nuclear option A yen for wastage… Not just in-laws (and outlaws); they’ve renowned academics at the helm! A friendly business group Engineering seats go abegging Naidu will soon build a new Hyderabad ONGC at KG Basin The brown list of Venkitaramanan to the lack of interest on the part of these to focus on original research. This despite the much lower costs of such research in India. The industry which thrived on the protection of a closed economy and the advantage of a vast domestic market, has failed to organise its evolution on healthy lines EVM is tamper-proof TIAM turns a full cycle Adharma of opposition politics Shipping woes of Chennai companies Poor representation for Kerala and TN in Cabinet Dr C Rangarajan returns to Chennai Fall in crude prices help in oil sector reform Inflation: are we emulating Argentina and Brazil? Editor's Notes The ‘Ayyo-yes’ is no more GNS - 100: our first subscriber Readers' Mail Scientists urged to take up farmer-oriented research Tribute CII projects higher growth… CRS, a jewel among managers, is no more. West Bengal: mindless malignancy There was flood of milk. Reason: no milk commissioner! 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Delhi returns to BJP PPP mode for upgrading Corporation Hospitals Odisha: spectacular win by Naveen Patnaik …and of a popular trade leader The rise and rise of KCP
 
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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