We are open to the idea of other financing models for MSMEs: Piyush Goyal
Commerce and Industry Minister Piyush Goyal on Thursday urged the industry to share some of the problems it faces in getting bank loans and suggested that the government is open to exploring alternative financing options for MSMEs.
He also said that the Department could allocate certain areas in the proposed industrial townships for MSMEs (Micro, Small and Medium Enterprises).
Exporters have expressed concern over declining bank credit, particularly in the MSME segment. While exports grew by 15 percent in rupee terms between 2021-22 and 2023-24, outstanding debt in March 2024 fell by 5 percent in the same month in 2022, according to exporters.
“I have given specific details (such as) what kinds of problems (MSMEs) are facing. Is too much collateral being asked for?
Let’s say ECGC (Export Credit Guarantee Corporation) cover is available, do they (banks) still ask for collateral, what kind of interest do they charge when 90 percent guarantee is taken by ECGC in case of any export credit failure?
“If we get that specific answer, we will be able to discuss it with the banks. ECGC is looking at Factor Services again but my opinion is that it is too expensive, people will still prefer to go to the bank to take money. Loans but we are open to the idea of other types of financing,” he said here at the event.
In August, the Cabinet approved 12 new project proposals under the National Industrial Development Program (NICDP) with an estimated cost of Rs 28,602 crore to establish industrial parks/townships in the country.
These industrial sites will be located at Khurpia in Uttrakhand, Rajpura-Patiala in Punjab, Dighi in Maharashtra, Palakkad in Kerala, Agra and Prayagraj in UP, Gaya in Bihar, Zaheerabad in Telangana, Orvakal and Kopparty in AP and Jodhpur-Pali in AP. Rajasthan.
“I am happy to commit to some area reserved for MSMEs because without MSMEs no big industries will survive. If Toyota invests Rs 20,000 crores in one of our industrial cities at Shendra-Bidkin in Sambhaji Nagar (Maharashtra), it is obvious that they will need it. 100 -MSME in its program to support the environment,” said Goyal.
In addition, he expressed “sorrow” that the industry is not responding to the single window system initiative.
Meanwhile, the union minister criticized the opposition parties saying that they are trying to divide society on the basis of caste, religion and language and are creating a fake story in the country.
He said that the Modi government’s programs do not discriminate people based on caste or religion.
“I think the recent election results have shown a little feeling among people especially in Uttar Pradesh, Rajasthan, Maharashtra and Haryana that they have disappointed the Prime Minister (Narendra Modi) for all the good things he has done for 10 years,” said Goyal.
In the recent Haryana assembly elections, the BJP won a stunning hat-trick in the state defeating the anti-incumbency and dashing the Congress’ hopes of a comeback. The saffron party won 48 out of 90 assembly seats in Haryana, more than the 46 majority mark.
Together with its partners Shiv Sena and NCP, the BJP-led alliance of Mahayuti has a majority of 230 seats (out of 288). Senior BJP leader Devendra Fadnavis will be sworn in as the new chief minister of Maharashtra at a ceremony in Mumbai that will be attended by the Prime Minister.
When asked about Maharashtra, Goyal told reporters that “I am happy that Eknath Shinde Ji and Ajit Dada Pawar will join Fadnavis Ji as Deputy Chief Minister in the state.” He added that the election results dispelled the fake story and divisive politics of the opposition parties.
