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Posted on Jan 31, 04:15PM | IBNS
By Hemanta Kumar Nath, Guwahati, Jan 31 : The Ministry of Micro, Small and Medium Enterprises (MSME) has raised the margin money for khadi and village industries from Rs 66 cr to Rs 100 cr in Assam for the next financial year 2013-2014.
This was announced by Union Minister of State for MSME (Independent) KH Muniyappa in Guwahati on Wednesday.
At a high-level meeting with Assam Chief Minister Tarun Gogoi and senior officials of Government of India and Assam government, the Union Minister said that 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," Muniyappa 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 guarantee," 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.
Additional Secretary and Development Commissioner of MSME, Amarendra Sinha, said the ministry has called for strict implementation of Reserve Bank of India (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 upon them as per RBI guideline," Sinha said.
The RBI had raised the limit of collateral free loan for MSEs from Rs 5 lakh to Rs 10 lakh in the year 2010.
Sinha called for support from the Assam 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," 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 Gross Domestic Product (GDP) of the country.