In the second term, the Modi government has numerous plans to boost the economy and create jobs. However, according to a report, India is struggling to create jobs. The unemployment rate is about 6.1%, which is highest since 1972-73.
MSME sector is one of the major sectors to create jobs, but they are also struggling with funds. Yesterday, representatives of micro, small & medium enterprises (MSMEs) and related stakeholders, met the Union Finance Minister, Nirmala Sitharaman and Ministry of Micro, Small and Medium Enterprises (MSME) Minister Nitin Gadkari, and highlighted the funding issues faced by the industry.
Representatives of micro, small and medium enterprises (MSMEs) also raised concerns over high-interest rates, delays in loan disbursal and banks insistence on collateral for working loans. The government has promised to look into this matter.
The sector creates 11.3 crore jobs across the country, but due to funding issue the industry itself facing difficulties to sustain. The issue is with the government portal “psbloansin59minutes” which is supposed to process loans in 59 minutes, but it has become a time-consuming process choking the funding funnel.
Mukesh Mohan Gupta, President, Chamber of Indian Micro Small and Medium Enterprises said, “The need of the hour is micro-financing for the MSMEs and there is an urgent need to create a special tribunal to tackle issues faced by the MSMEs.”
Nirmala Sitharaman and Nitin Gadkari promised to solve the issue. “MSMEs have demanded a differential interest rate for the sector. Issues related to working capital and Goods and Service Tax (GST) were also brought up,” a government official said after the meeting.
Nitin Gadkari, MSME minister, said that the MSME sector creates 113 million jobs and the government will solve the problems with the highest priority. “The problem with the 59 minutes (loan scheme) is that banks immediately sanction the loan but it is delayed for disbursement. Today, we have recommended to the banking secretary to find out the reasons for delayed disbursements.”
Earlier on Monday, the government asked banks to extend the ‘psbloansin59minutes’ scheme to the retail sector as well.