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Press Release

Cooperative banks likely to be included as lenders under ECLGS Scheme; Govt. aims to increase MSMEs' contribution to 50% of GDP: Nitin Gadkari

Aug 10, 2020

Lending procedure witnessing major transformation due to digitization: Chairman, SBI

 

NEW DELHI, 10 August 2020: Mr Nitin Gadkari, Minister of MSME and Road Transport and Highways, Govt of India, today said, "Cooperative banks that are not included as a member lending institution under the Emergency Credit Line Guarantee Scheme (ECLGS) will be included as lenders for MSMEs, under a scheme being discussed in consultation with the RBI."

 

Addressing a webinar on 'FICCI-SBI Atmanirbhar MSME Virtual Conclave', Mr Gadkari urged the states to release payments due to micro, small and medium enterprises (MSMEs) within 45 days. "This will help bring liquidity, which will accelerate the economic growth of the country," he said.

 

The minister emphasized that special focus towards export enhancement is the need of the hour, and there is also a need to focus on import substitution to replace imports with domestic production. He further urged the industry to identify the sectors heavily reliant on imports, particularly from China, and look for substitutes towards indigenous production to make India Atmanirbhar.

 

He added that the government aims to increase MSMEs' contribution to 50% of GDP and share of exports to 60% which help the sector create 50 million jobs in the next five years. Mr Gadkari said, "The government is formulating a special policy to generate employment in the rural areas and aims to increase the turnover of village industries and encourage medium scale units such as ago and food processing industries, handloom, and handicrafts."

 

Mr Jagadish Shettar, Minister of Medium & Large-Scale Industries, Govt of Karnataka said, "The new Industrial policy of the Karnataka State Government for 2020-25 will be pro-industry and aligned with reshaped reforms." Highlighting that Karnataka is a conducive place for industries to grow, he said that the state provides the right infrastructure support across industries, and the reforms by the government of India will provide the much-needed support to the MSME sector.  "Home to several industry specific SEZs and innovation parks, Karnataka also provides the right kind of infrastructural support, across industries. A robust supply chain network ensures resources are never a problem. The cluster-based development approach unveiled by the state would give much needed economies of scale for companies who would like to invest in selected sector. The FMCG cluster, the defence cluster etc are going to have great impact in the industrial development of the state" said Mr Shettar.

We are hopeful that the state policies along with the series of historic measures brought out by the Government of India would help the industry and particularly the MSME sector with several important support schemes. The Atma Nirbhar schemes have brought back the much needed momentum to the manufacturing process and we are certain that in the coming period as we come out of the current crisis, the economy would be able to bounce back with robust growth and momentum.

Mr Rajnish Kumar, Chairman, State Bank of India, said, "The advancement of digital technology has revolutionized the process of lending to MSMEs as the availability of data and technology in the form of analytics has made it easier to automate lending decisions to the sector, which until now posed challenges."  We will be using the digital platform in a big way for lending, he added. Mr Kumar said, "To provide Rs 50,000 crore equity support to stressed MSME units, a Fund of Funds is formed as a part of Rs 20.97 lakh crore Aatmanirbhar Bharat Abhiyan package and this scheme will be operational soon." Speaking about the various steps taken to help MSMEs, he said SBI announced an emergency credit line for MSMEs to improve their liquidity which has been hit by the outbreak of COVID-19.The SBI chairman said the bank recently launched a gold loan scheme for MSMEs and sanctioned Rs 88 crore under this product within one month. 

Mr Uday Shankar Sr Vice President FICCI said, "We are heartened by the fact that Mr Nitin Gadkari has committed to increasing the share of the MSME sector to 50% in India's GDP." He also requested the Minister to allow the smaller cinema halls to function with 50% occupancy and urged for a special support package to develop import substitution units targeting the MSME sector.

 

Mr Ullas Kamath, Chairman, FICCI Karnataka State Council and Joint Managing Director of Jyothi Labs Ltd said that the industrial policy of Karnataka announced recently has unique and liberal measures which will investors easy access to land and infrastructure for investments. He said that the much-awaited policy has several unique and innovative features which will lead to next level of Investment and growth in the state of Karnataka. He observed that with the turnover based incentives system proposed in the new policy, will help to attract more investments from the MSME sector. Several pro-active measures taken by the government of Karnataka in the recent past; particularly the amendment of Land reforms act, the labour act, and the Karnataka Industries (Amendment) act are helpful to augment substantial investments.

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