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MSME Sector Hit by Financial Crunch

MSME sector which contributes significantly to the Indian economy particularly in terms of   export and employment is facing severe financial crunch. The capital inflow for growth of the sector is much below the expectation.  As a fall out of it the sector is languishing. This was observed by Balasore MP and member of standing committee on industry RK Jena , in a meeting of ASSOCHAM   (The Associated Chambers of Commerce and Industry of India ) held recently in Delhi .

Deliberating on a topic in the meeting ’11 International summit SEZ and Industrial parks’ , Jena said when Britishers  entered into India  the contribution  of our country  to world market was about 45 percent , but after 200 years of rule when they left (India)  the contribution reduced drastically  to  mere 2 percent as the small and medium industry sector witnessed a terrible neglect .  
He  observed that although the successive governments  had made effort to revive  the MSME sector, which employs about 94 percent of work force  of unorganized sectors,   yet failed to yield any substantial  result  due to various factors .One of the major reasons  for plugging of MSME sector     is  unavailability  of capital . The shortfall in the flow of credit is around Rs 32.5 trillion in the sector, as per various World Bank reports, Jena maintained.

“About two and half a decade ago although liberalization has taken place in India and several reforms were affected   yet unfortunately no tangible change is witnessed in the MSME sector. The liberalization leverage has been availed by the corporate sector but MSME sector continue suffer with the bottle neck of credit inflow. For revival of the MSME sector the need of hour a better legislative and regulatory environment besides finance and market,” said Jena.   


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