Lok Sabha Question No. 243 (STARRED), answered on 2019-12-05
Subject: Small and Medium Industries
Ministry: MICRO,SMALL AND MEDIUM ENTERPRISES
Asked by: Chandeshwar Prasad

## GOVERNMENT OF INDIA

## MINISTRY OF MICRO, SMALL AND MEDIUM ENTERPRISES

## LOK SABHA STARRED QUESTION NO. *243

## TO BE ANSWERED ON 05.12.2019

## SMALL AND MEDIUM INDUSTRIES

- *243. SHRI  CHANDESHWAR  PRASAD:

Will the Minister of MICRO, SMALL AND MEDIUM ENTERPRISES be pleased to state:

- (a) whether the share of small and medium industries in sick units has increased during recent years and if so, the details thereof;
- (b) the main reasons for increase in the number of sick units; and
- (c) the steps taken by Government for provide assistance to these units and keep them running?

## ANSWER

MINISTER OF MICRO, SMALL AND MEDIUM ENTERPRISES (SHRI NITIN GADKARI)

- (a) to (c): A statement is laid on the Table of the House.

## STATEMENT REFERRED TO IN REPLY TO PART (a) to (c) OF THE LOK  SABHA  STARRED  QUESTION  No.  *243  FOR  ANSWER  ON 05.12.2019

(a): The  Reserve  Bank  of  India  has  issued  guidelines  on  'Framework  for Revival  and  Rehabilitation  of  Micro,  Small  and  Medium  Enterprises'  to Scheduled  Commercial  Banks  (excluding  Regional  Rural  Banks)  in  March 2016.  Under  this  Framework,  banks  have  been  advised  to  identify  incipient stress in the MSME accounts and refer it to the Committees formed under the Framework for suitable Corrective Action Plan viz. rectification, restructuring and recovery. Data in this regard for the half year ended March 2019 vis-a-vis for  the  half  year  ended  March  2018  received  from  Reserve  Bank  of  India  is furnished in the Annexure.

With  a  view  to  facilitate  meaningful  restructuring  of  Micro,  Small  and Medium Enterprises (MSMEs) accounts {MSME as defined in the Micro, Small and Medium Enterprises Development (MSMED) Act, 2006} that have become stressed,  it  was  decided  to  permit  one-time  restructuring  of  existing  loans  of MSMEs classified as 'standard' without a downgrade in the asset classification, subject to certain conditions. RBI issued guidelines to Scheduled Commercial Banks  vide  circular  DBR.No.BP.BC.18/21.04.048/2018-19  dated  January  1, 2019.

- (b): As per the final report of Fourth All India Census of Micro, Small and Medium  Enterprises  (MSMEs)  some  enterprises  get  closed  due  to  lack  of demand, shortage of working capital, non availability of raw materials, power shortage,  marketing  problems,  labour  problems,  management  problems  and equipment problems.
- (c): In order to enhance competitiveness & sustainability of Micro, Small and Medium Enterprises (MSMEs), Government has taken several measures. These include Prime Minister's  Employment  Generation  Programme  (PMEGP), Scheme of Funds Regeneration of Traditional Industries (SFURTI), A scheme for  Promoting  Innovation,  rural  Industry  and  Entrepreneurship  (ASPIRE), Credit  Linked  Capital  Subsidy  and  Technology  up-gradation  Scheme  (CLCSTUS), Credit Guarantee Scheme, Interest Subvention Scheme,  Micro & Small Enterprises-Cluster  Development  Programme  (MSE-CDP),  National  Schedule caste  and  Schedule  tribe  Hub  (NSSH),  MSME  Sambandh  and  MSMESamadhaan portal etc.

****

Annexure referred to in reply to part (a) of Lok Sabha Starred Question No. *243 for answer on 05.12.2019.

## Framework for Revival and Rehabilitation of Micro, Small and Medium Enterprises for the half year ended March 2019 vis-a-vis for the half year ended March 2018

Cases in actual

| Sector             | Micro, Small &Medium Enterprises cases handled by the committees   | Micro, Small &Medium Enterprises cases handled by the committees   | Micro, Small &Medium Enterprises cases handled by the committees   | Micro, Small &Medium Enterprises cases handled by the committees   | Micro, Small &Medium Enterprises cases handled by the committees   | Micro, Small &Medium Enterprises cases handled by the committees   | Micro, Small &Medium Enterprises cases handled by the committees   | Micro, Small &Medium Enterprises cases handled by the committees   | Micro, Small &Medium Enterprises cases handled by the committees   | Micro, Small &Medium Enterprises cases handled by the committees   |
|--------------------|--------------------------------------------------------------------|--------------------------------------------------------------------|--------------------------------------------------------------------|--------------------------------------------------------------------|--------------------------------------------------------------------|--------------------------------------------------------------------|--------------------------------------------------------------------|--------------------------------------------------------------------|--------------------------------------------------------------------|--------------------------------------------------------------------|
| Sector             | No. of cases referred to the committees during the HY              | No. of cases referred to the committees during the HY              | No. of cases resolved by the                                       | No. of cases resolved by the                                       | Corrective Action of (2))                                          | Corrective Action of (2))                                          | Plan (CAP) by the committees (Out                                  | Plan (CAP) by the committees (Out                                  | Plan (CAP) by the committees (Out                                  | Plan (CAP) by the committees (Out                                  |
| Sector             | ended (1)                                                          | ended (1)                                                          | committees during the HY ended (2)                                 | committees during the HY ended (2)                                 | Rectification                                                      | Rectification                                                      | Restructuring                                                      | Restructuring                                                      | Recovery                                                           | Recovery                                                           |
| Sector             | Mar-18                                                             | Mar-19                                                             | Mar-18                                                             | Mar-19                                                             | Mar-18                                                             | Mar-19                                                             | Mar-18                                                             | Mar-19                                                             | Mar-18                                                             | Mar-19                                                             |
| Micro Enterprises  | 87735                                                              | 86228                                                              | 86450                                                              | 94309                                                              | 55913                                                              | 49162                                                              | 726                                                                | 12672                                                              | 29811                                                              | 32475                                                              |
| Small Enterprises  | 38843                                                              | 44457                                                              | 39286                                                              | 43963                                                              | 23806                                                              | 25414                                                              | 231                                                                | 2217                                                               | 15249                                                              | 16332                                                              |
| Medium Enterprises | 3630                                                               | 11590                                                              | 4737                                                               | 8247                                                               | 1773                                                               | 4161                                                               | 67                                                                 | 536                                                                | 2897                                                               | 3550                                                               |
| Total MSMEs        | 130208                                                             | 142275                                                             | 130473                                                             | 146519                                                             | 81492                                                              | 78737                                                              | 1024                                                               | 15425                                                              | 47957                                                              | 52357                                                              |

As reported by Scheduled Commercial Banks

* Number of cases resolved by the committees is more than the cases referred due to some pending cases with the committees at the beginning of the half year which have been resolved during the period.
- i. It  is  observed  that  Rectification  is  the  preferred  Corrective  Action  Plan  (CAP)  of  the committees under the Framework, with the option being exercised in 53.74% of the total cases resolved for the half year ended March 2019. The option of Recovery was exercised in 35.73% of cases resolved for the half year ended March 2019.
- ii. Maximum cases referred to the committees and resolved were of Micro Enterprises.