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Meeting on liquidity crunch and impact on MSME sector

24
Oct '08

The Union Minister for Micro, Small & Medium Enterprises Shri Mahabir Prasad presided over the 6th meeting of the National Board for Micro, Small and Medium Enterprises (NBMSME) on October 23, 2008.

The main agenda for the sixth meeting of the NBMSME were:

- Prime Minister Employment Generation Programme and the issue of the liquidity crunch and its impact on MSME sector.

- Various State Ministers, representatives of MSME Associations and Trade Unions, from all over the country and senior officials of various ministries from the central as well as the State Governments participated in the deliberations.

- Shri Prasad talked at length about the new credit linked subsidy programme called Prime Minister's Employment Generation Programme (PMEGP).

A Central Scheme which will be under the Ministry of MSME. The Scheme will generate approximately about 37.38 lakh additional employment opportunities. The Minister expressed concern about the recent liquidity crunch in the Indian economy and said, “I have taken up the matter with the Ministry of Finance for earmarking certain percentage of the funds for MSME to improve their credit availability.”

Representatives from MSMEs from all over India also expressed their concern on the liquidity crunch and its impact on the credit availability to the MSME sector.

The representatives of MSMEs apprehended that the liquidity crunch may mainly squeeze the credit availability to the MSME sector and desired that necessary measures may be taken by the Reserve Bank of India (RBI).

The Executive Director of the RBI elaborated on the various measures taken by the RBI to improve the liquidity position and informed that necessary steps are being taken to enhance the credit flow to the MSME sector.

The Minister (MSME) assured the National Board that effective steps are being taken by the Government in consultation with the RBI and he urged the RBI and the banks to ensure that there is no adverse fallout of the liquidity crunch on credit availability to the MSME sector.

The Executive Director, RBI also informed that the credit to the micro and small enterprise sector has more than doubled (from Rs.68,000 crore at end-March 2006 to Rs.1,48,651 crore at end-March 2008) in a span of 3 years, as against Government's target of doubling the same in 5 years.

Shri Dinesh Rai, Secretary, Ministry of Micro, Small & Medium Enterprises and Shri Jawhar Sircar, Addl. Secretary and Development Commissioner also participated in the Meeting.

Press Information Bureau

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