Namrata Kath Hazarika | 23 May, 2013
The
share of the Indian Micro, Small and Medium Enterprise sector is expected to
increase up to 50 percent in nation's total exports in the 12th Plan from 36
percent now, Minister of State (Independent Charge) for MSME K H Muniyappa said
on Thursday.
"Earlier, it
(the share of MSMEs in the country's total exports) was 40 percent, but now it
has reduced to 36 percent due to demand slowdown in western markets,"
Muniyappa said, adding that "the contribution is likely to be up to 50
percent by 2017".
He added that this
increase is expected on account of increasing demand from the western and
emerging markets.
Muniyappa was
talking to reporters on the sidelines of a CII function in New Delhi.
On
the credit problem, the minister said that the bank is supporting to boost finance
and help in the growth of MSME exports in the country.
He
stressed that availability of adequate credit is paramount to the success of
the micro and small enterprises (MSEs). MSEs
primarily rely on bank finance for a variety of purposes including purchase of
land, building, plant and machinery as also for working capital.
In
fact, the government has implemented the "Credit Guarantee Scheme" that provides cover up to 85 per cent on
collateral-free credit facility extended by lending institutions to new and
existing MSEs for loans up to Rs 100 lakh, he said.
"You
will happy to know that more than 11 lakhs proposals have been approved under
the scheme till April 2013 providing guarantee cover for total sanctioned loan
amount Rs 54, 322 crore," he added.
The
minister also said that flexible and easily availability of loan is essential. We
need to encourage entrepreneurship as well as good quality and standards.
He
asked entrepreneurs (especially SMEs) to not only avail loans but to repay them
timely.
The
MSME sector contributes around 9% of GDP and accounts for around 45% of the
manufacturing output at the moment.
The sector of 3.6
crore thriving enterprises employing over 8 crore persons but the sector is
continuously exhibiting a growth rate far above the large sector.
The main markets of
20 most exported MSME product groups, which constituted more than
90% of MSME exports during 2009-12 included USA, European Union (EU), UAE,
Turkey, Singapore, Hong Kong, Israel and Saudi Arabia.