MSMEs in India are a core contributing factor to the Indian economy. However, they are facing a shortage of Rs 25 trillion. According to details, the government plans to introduce a dedicated lending institution for Micro, Small, and Medium Enterprises (MSMEs). This will enhance the credit availability in this crucial sector.
This initiative will especially support small industries by providing loans. The industry has called for increased financial support, as current institutions like the Small Industries Development Bank of India (SIDBI) primarily focus on refinancing loans rather than providing direct funding.
It is noticeable that the Punjab State Industrial Development Corporation (PSIDC) and Punjab Finance Corporation (PFC), are experiencing a shortage of funds and stopped credit flow. The liability worth Rs 400 crore has been recorded by PSIDC even though they did not give any loans to any company.
There is a need to focus on MSMEs because they play a crucial role in the economic growth of the country. Along with it, this job opportunities as well which reduces the unemployment rate. Business owners have a lack of knowledge about the government schemes that support MSMEs financially. Also, it is challenging for them to secure loans from banks and other financial institutions.
Currently, there are over 64 million MSMEs in India, and in which 99% are classified as micro-enterprises. As per the details, the sector has generated over 110 million jobs and twenty-three percent of the country’s labour force work under MSMEs. These number shows why government needs to support MSMEs and why MSMEs need to get massive support to grow faster.