The government will soon take a call on the recommendations of U K Sinha committee to strengthen micro, small and medium enterprises sector, Union Minister Nitin Gadkari said on Thursday. The committee set up by the RBI under the former Sebi chief among other things had recommended creation of distressed asset fund with a corpus of Rs 5,000 crore, insurance coverage to employees of MSMEs on the lines of Pradhan Mantri Suraksha Bima Yojana (PMSBY) and Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) schemes, and cash flow-based lending.
Speaking at the 'National Workshop on Credit Linked Capital Subsidy' and 'Discussion on Delayed Payment for MSMEs', Gadkari also stressed that to make India a USD 5 trillion economy in the coming years, MSMEs will have to raise their contribution to GDP from the current 29 per cent to 50 per cent, in addition to increasing exports from the sector to 50 per cent from 40 per cent at present.
Referring to instances where goods are supplied by micro, small and medium enterprises (MSMEs) but a particular person or entity does not make payment after taking their delivery on multiple occasions, Gadkari said stringent action needs to be taken against such habitual offenders and the government will certainly take remedial measures in this regard. On UK Sinha panel report, the minister said he has spoken to the finance minister and it has been decided that finance secretary and his MSME counterpart will prepare a final report on the recommendations in the next eight days.
"The Sinha Committee appointed by the Reserve Bank has given its suggestions. I have spoken to the Finance Minister today and we have decided that Finance Secretary and our (MSME) Secretary will sit together and submit a final report on the Sinha Committee recommendations after consulting stakeholders, so that we can implement it in the 15 days thereafter," said MSME Minister Gadkari, who also holds the portfolio of the Road Transport and Highways Ministry. The committee was set up to review the framework for MSMEs, and suggest long-term solutions for economic and financial sustainability for the sector, study the impact of recent economic reforms, and identify the structural problems impacting its growth.
Addressing the workshop, Gadkari said delay in payments to MSMEs leads to erosion of their working capital and he has spoken with the finance minister to address the issue. He said there was a need to strengthen the MSME sector to add five crore jobs to the 11 crore created till now. Besides, Development Commissioner (MSME) Ram Mohan Mishra said last week there was a meeting of CPSEs called by the finance ministry and they have been instructed to clear all pending dues owed to micro and small enterprises.