Micro, Small and Medium Enterprises (MSMEs) are the backbone of the Indian economy …. This sector is key to addressing the lingering job crisis in the country. This is what we often hear in speeches. There is no doubt that the sector is of utmost importance to the economy and the government has taken steps after steps to promote the sector in the past few years. But unfortunately the challenge is so big that the sector still lacks adequate support.

Last week, on occasion of the MSME Day 2019, the MSME minister said the government is committed to raise the contribution of the sector to GDP to 50 percent from the present 29 percent. Also, he added, the Centre would ensure that employment generation by the sector increases to at least 15 crore people against the 11.1 crore at present.  The minister also emphasized on the urgent need to encourage research and innovation in the sector, collaborate with global entities to bring in the latest technology and best practices and also promote marketing.

In a similar tone, the Finance Minister last week said that the RBI and the Government have taken several steps time to time to ensure credit flow to the sector. She mentioned about measures like advice to all Scheduled Commercial Banks (SCBs) to achieve a 20% year-on-year growth in credit to MSEs and allocation of 60% of the MSEs advances to the Micro Enterprise Accounts. And on another occasion, the Centre said that all public sector banks were requested that a CGM/GM level officer may be specifically designated to do an in-depth analysis of the MSME credit issue.

While such comments are inspiring, I hope the government, in the upcoming Budget, will leave no stone unturned to address the lingering worries of the MSME sector. Our MSMEs, including those engaged in exports, are still facing a lot of issues which need to be addressed in a comprehensive manner if Indian economy is to perform well consistently in the coming years. Of course, the government has no magic wand to solve all the issues in one go, but steadily it must move towards strengthening the sector.

I invite your opinions.