SME Times is powered by   
Search News
Just in:   • India’s IPO market poised to raise $20 billion in next 12 months  • NITI Aayog unveils roadmap on AI to empower 490 million informal workers  • New French PM expected to be appointed within next 48 hours: Lecornu  • Guterres welcomes Gaza deal, sees opportunity for two-state solution   • PM Modi welcomes Israel-Hamas pact on 1st phase of Prez Trump's peace plan 
Last updated: 27 Jun, 2023  

Rupee.9.New.Thmb.jpg MSME: Working capital challenge

Rupee.9.New.jpg
   Top Stories
» India’s IPO market poised to raise $20 billion in next 12 months
» PM Modi meets Keir Starmer in Mumbai for strengthening India-UK ties
» Piyush Goyal, Keir Starmer discuss ways to deepen trade and economic partnership
» PM Modi inaugurates Phase 1 of Navi Mumbai International Airport
» Gold prices hit historic highs globally, Indian rates touch Rs 1.22 lakh on MCX
Bikky Khosla | 27 Jun, 2023

Imminent slowdown in advanced economies, particularly the US and the EU will adversely impact one out of five Indian Micro, Small and Medium Enterprises, states a latest report. A third of our overall exports are shipped to these two major markets and considering that MSMEs contribute around 40 percent to the export basket, there is little doubt that slowdown in these major economies will hit the sector one way and another.

The report particularly points out that Indian MSMEs will see stretched working capital. According to its estimate, MSME sector’s debt requirement stands at more than Rs 100 lakh crore and out of this around 70 percent is for working capital. But our MSMEs source only a fourth of their debt requirement formally while cost of borrowing from the informal segment is extremely high. This again implies vulnerability of the sector.

The report, which covers 69 sectors and 147 clusters, adds that MSMEs in sectors like gems and jewellery, dyes and pigment and construction are already witnessing high working capital requirements, with the Ahmedabad cluster – majorly populated by dyes and pigments, pesticides and pharma companies - and the Surat cluster – mainly comprising diamond exporters - witnessing their working capital days swelling to 20-25 days and 35 days, respectively.

Working capital management is key to profitability and survival for MSMEs, and considering the huge gap between supply and demand for working capital credit for the sector and the declining trend in exports for quite some time now due to slowdown in our major markets, it seems easy and low cost of credit to the MSMEs is the need of the hour. The Centre should urgently step in to address this concern.

I invite your opinions.

 
Print the Page
Add to Favorite
 
Share this on :
 

Please comment on this story:
 
Subject :
Message:
(Maximum 1500 characters)  Characters left 1500
Your name:
 

 
  Customs Exchange Rates
Currency Import Export
US Dollar
₹84.00
₹82.25
UK Pound
₹104.65
₹108.10
Euro
₹92.50
₹89.35
Japanese Yen ₹56.10 ₹54.40
As on 25 Jul, 2025
  Daily Poll
Who do you think will benefit more from the India - UK FTA in the long run?
 Indian businesses & consumers.
 UK businesses & consumers.
 Both will gain equally.
 The impact will be negligible for both.
  Commented Stories
 
 
About Us  |   Advertise with Us  
  Useful Links  |   Terms and Conditions  |   Disclaimer  |   Contact Us  
Follow Us : Facebook Twitter