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Govt to set up NAFUS for growth of MSMEs
Jun '09
Two measures have been proposed for the growth of micro, small and medium enterprises (MSMEs) in the country.MSMEs constitute an important sector of the Indian economy, contributing significantly to the manufacturing output, employment and exports, however, the desired growth has not been achieved in this sector till date.

Shri Dinsha Patel, Minister of State (Independent Charge) for the Ministry of Micro, Small and Medium Enterprises expressed this view during his meeting with the Prime Minister during discussion on various issues concerning this Ministry. The issues discussed included several disadvantages in terms of access to finance, technology development, unfavourable markets, etc. and support to grow.

Shri Dinsha Patel expressed concern over finance which has remained the major constraint in the growth of enterprises in the unorganised sector, which are mainly micro enterprises. He proposed two measures , setting up of a National Fund for the Unorganised Sector(NAFUS) to provide credit support exclusively to the micro enterprises. This has been recommended by the National Commission for Enterprises in the Unorganised Sector.

Initially the fund could be set up under Small Industries Development Bank of India (SIDBI) and later on a separate institution need to be set for this purpose , the minister suggested. Second suggestion says while stipulation of a separate sub-target for the MSME sector has not been found feasible, earmarking of specific percentage of net bank credit (say, 6%) for the micro enterprises under the priority sector lending targets needs to be considered to ensure increased access to credit by micro enterprises.

Demand for MSE products has been another area of concern, more so in the present global economic scenario. Shri Dinsha Patel requested to lay down an annual goal for procurement from the MSE sector for the Central Ministries/Departments/PSUs, with the objective of purchases which will be a great support to this sector. In this regard, MSME Ministry will come up with a Procurement Policy for this sector.

The global economic slowdown has impacted the export-oriented sectors of the industry like Gems and Jewellery, Textiles and Leather, leading to considerable job loss. A special package needs to be worked out for them.

Press Information Bureau

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