Staff Reporter | 13 Oct, 2008
Industry body the Confederation of Indian Industry (CII) has called for the government and the RBI to take immediate action to protect SMEs and boost flailing investor sentiments by creating an SPV for meeting SMEs' lending requirements, slashing the repo rate by at least 50 basis points effective immediately, protecting the rupee, among a slew of additional measures to shield Indian markets from the global meltdown. This comes after the stock market nosedived recently and the latest industrial growth figures saw no positive signs for India Inc.
CII director general Chandrajit Banerjee while appreciating the initiatives taken by the government, said, "There are other measures as well which need to be taken to ward off any fears of a crisis."
The continuous tightening of monetary policy tools over the last two years to check Inflation have led to a serious liquidity crisis in the economy and SMEs have been disproportionately hurt by the non-availability of credit.
CII has recommended the setting up of a Corpus to extend credit to them and the RBI could reduce the risk weight for lending to SMEs.
Simultaneously, a SPV could be set up by the RBI and the Ministry of Finance with contribution from banks which would ensure that SMEs are allowed credit close to PLR rates depending on the creditworthiness of the unit and the project.
CII for immediate action to protect SMEs C.S.Birla | Thu Oct 16 09:44:13 2008
SME sector in India is Smart, Moving and Efficient .Every effort must be maintained by concerned agencies to safeguard them for ensuring that they continue to play an important role in the economy .