Monday, August 8, 2011

Development and Promotion of MSMEs

The report submitted by the Task Force on Micro, Small and Medium Enterprises (MSMEs) has made recommendations on policy / programme support, institutional matters and legal / regulatory measures for the growth of MSMEs in the country. The recommendations made cover the thematic areas of credit, taxation, labour issues, infrastructure / technology / skill development, marketing, rehabilitation and exit policy and special measures for North-Eastern Region and Jammu and Kashmir. On the thematic area of credit, the Task Force has made various recommendations for enhancing its flow to the sector which, inter alia, include: (i) 20 per cent year-on-year growth in credit to micro and small enterprises (MSEs); (ii) strict adherence to allocation of 60 per cent of MSE credit to micro enterprises and (iii) 15 per cent annual growth in number of micro enterprise accounts by scheduled commercial banks.

. Based on the recommendations of the Working Group constituted to review the Credit Guarantee Scheme (CGS), Reserve Bank of India has issued instructions in May, 2010 making it mandatory for banks not to accept collateral security in the case of loans upto Rs.10 lakh extended to units in the MSE sector. RBI has informed that whenever any specific complaint against a bank is received, the matter is taken up with the Head Office of the concerned banks to resolve the issue. Banks have also set up MSME Care Centres to facilitate entrepreneurs for quick redressal of their grievances.

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