The Ministry of Micro, Small and Medium Enterprises (MSME), Government of India has raised the margin money for khadi and village industries from Rs 66 cr to Rs 100 cr to Assam in the next financial year 2013-2014, the Union Minister of state for MSME (Independent) KH Muniyappa said in Guwahati on Wednesday.
At a high level meeting with Assam Chief Minister Tarun Gogoi and senior officials of GOI and GOA, the Union Minister said his ministry wants to reach out to the young and educated people to set up new enterprises for which it has adequate funds.
“The mission of our ministry is to promote growth and development of Micro, Small and medium Enterprises, including Khadi, Village and Coir Industries, in cooperation with concerned ministries, departments, state governments and other stakeholders by providing support to existing enterprises and encouraging creation of new enterprises,” the Union Minister said.
The Union Minister urged the Assam CM to instruct the deputy commissioners to prepare the list of beneficiaries within a set time frame of three months for extending loan assistance.
“Banks have been instructed to advance the loan without asking for collateral,” Muniyappa said.
On the poor credit ratio in Assam, the Union Minister said that, all the commercial banks should achieve a 20 per cent growth in credit year-on-year to micro and small enterprises and strictly adhere to the allocation of 60 per cent to micro enterprises to ensure enhanced credit flow.
“The credit ratio is 40 to 50 per cent in Assam while the national average is about 70 per cent,” Muniyappa said.
Meanwhile, the Additional Secretary and Development Commissioner of MSME, Amarendra Sinha said the ministry called for strict implementation of RBI norms for micro and small units.
“The MSME ministry has asked the Finance Ministry to ask banks to give collateral free loans of up to Rs 10 lakh to micro and small enterprises which is mandatory as per RBI guideline,” Sinha said.
The RBI raised the limit of collateral free loan for MSEs from Rs 5 lakh to Rs 10 lakh in the year 2010.
Amarendra Sinha called for support from the Assam state government for building up necessary infrastructure for the downstream industries coming up from the Gas Cracker Project.
“It has huge potential in generating employment opportunities in Assam,” the Assam CM Tarun Gogoi said.
Employing over 70 million people across the 26 million enterprises in India, the MSME sector contributed 8 per cent to the total GDP of the country.