New Delhi, (Asian independent) As the Emergency Credit Line Guarantee Scheme, specially formed for MSMEs, progresses, the government is considering allowing cooperative banks to lend under it too.
Addressing a webinar at the ‘FICCI-SBI Atmanirbhar MSME Virtual Conclave’, Micro, Small and Medium Industries Minister Nitin Gadkari said that the government is discussing the matter with the Reserve Bank of India (RBI).
“Cooperative banks that are not included as a member lending institutions under the Emergency Credit Line Guarantee Scheme (ECLGS) will be included as lenders for MSMEs, under a scheme being discussed in consultation with the RBI,” a FICCI statement quoted Gadkari as saying.
He also urged the states to release payments due to MSMEs within 45 days, as “this will help bring liquidity, which will accelerate the economic growth of the country”.
Gadkari emphasised that special focus towards export enhancement is the need of the hour, and there is also a need to focus on import substitution to replace imports with domestic production.
He also urged the industry to identify the sectors heavily reliant on imports, particularly from China, and look for substitutes towards indigenous production to make India self-reliant.
Gadkari also said that the government aims to increase MSMEs’ contribution to the GDP to 50 per cent and in share of exports to 60 per cent, which would help the sector create 5 crore jobs in the next five years.
“The government is formulating a special policy to generate employment in the rural areas and aims to increase the turnover of village industries and encourage medium scale units such as ago and food processing industries, handloom, and handicrafts,” he said.
State Bank of India Chairman Rajnish Kumar said that the advancement of digital technology has revolutionised the process of lending to MSMEs as the availability of data and technology in the form of analytics has made it easier to automate lending decisions to the sector.
“We will be using the digital platform in a big way for lending,” he said.