The Indian industry has hailed the recent launch of a "historic" Support and Outreach Initiative for the micro, small and medium enterprise (MSME) sector.

Industry body ASSOCHAM, in a press statement, most heartily welcomed the measures announced by Prime Minister Modi for the MSME sector.

"These measures are very comprehensive, covering the whole gamut of issues faced by the MSMEs in India," said ASSOCHAM secretary general Uday Kumar Varma.

"We are confident that these measures will certainly go a long way in mitigating the pains of the MSME sector and also give them new energy and vigour," said Varma.

He added, "These are Deepawali gifts in the true sense of the term to the MSME sector in the country."

Exporters' body FIEO has also expressed satisfaction over increase in interest equalization rate from 3% to 5%, adding that it will provide competitiveness and level playing field to MSME exporters.

Hailing the announcement, made by the Prime Minister Narendra Modi, FIEO said increasing the interest equalization from 3% to 5% is very timely move and will help the exporters to get credit at competitive rates close to international benchmark.

Coming at a time when interest rates are moving northwards, the deeper support of 5% would provide much needed relief to MSME exporters who were burdened by increasing cost of credit, FIEO added.

This move shows that government is very keen to lend a helping hand to MSME to boost exports and create jobs in the country, it said.

Before the launch of the programme, ASSOCHAM, terming the programme as the much needed step to boost the confidence of trade and industry, said that the move would not only promote development of MSMEs but also help generate employment countrywide.

"Timely, easy and adequate finance is lifeline for the SME sector which is the most powerful engine of India's economic growth," said ASSOCHAM president Balkrishan Goenka.

Highlighting the importance of the MSME sector, Goenka also said that it is the backbone of Indian economy as it contributes about 30 per cent of India's gross domestic product (GDP) and 49 per cent of exports.