Lok Sabha Question No. 154 (STARRED), answered on 2018-07-27
Subject: Small and Medium Enterprises
Ministry: FINANCE
Asked by: DUSHYANT SINGH

## GOVERNMENT OF INDIA MINISTRY OF FINANCE DEPARTMENT OF FINANCIAL SERVICES

## LOK SABHA STARRED QUESTION NO. *154 TO BE ANSWERED ON 27 th  JULY, 2018 / SHRAVANA 5, 1940 (SAKA)

## 'SMALL AND MEDIUM ENTERPRISES'

## * 154 : Shri Dushyant Singh :

Will the Minister of FINANCE be pleased to state :

(a) whether his Ministry has taken any steps to encourage the demand for credit for the Small and Medium Enterprises (SMEs) after recapitalisation of banks; (b) if so, the details thereof and if not, the reasons therefor; (c) whether his Ministry has devised any plan for the Public Sector Banks (PSBs) to lay special focus on the credit generation for SMEs; and

- (d) if so, the details thereof and if not, the reasons therefor ?

ANSWER FINANCE MINISTER

## (SHRI PIYUSH GOYAL)

- (a) to (d)  :  A Statement is laid on the Table of the House.
- ******

## STATEMENT REFERRED IN REPLY TO LOK SABHA STARRED QUESTION NO. *154  FOR  ANSWER ON 27 th   JULY  2018,  TABLED  BY  SHRI  DUSHYANT  SINGH REGARDING SMALL AND MEDIUM ENTERPRISES. (a) to (d) :

The recapitalisation of Public Sector Banks (PSBs) by Government was accompanied by  a  reforms  package.  The  reforms  agenda  aimed  at  Enhanced  Access  &  Service Excellence (EASE), encapsulates a synergistic approach to ensuring prudential and clean lending, better customer service, enhanced credit availability, PSBs as Udyami Mitras  for  Micro,  Small  and  Medium  Enterprises  (MSMEs),  and  better  governance. This inter-alia, includes Board approved policy for enhanced working capital to GSTregistered  MSMEs,  enabling  MSME  financing  through  cluster-based  financing  and financial  technologies  (FinTech)  ,  time  bound  and  automated  processing  of  MSME loan  proposals,  single  point  MSME  relationship  officers,  registration  of  all  Banks  on Trade  Receivables  Discounting  System  (TReDS)  for  ease  of  bill  realisation  for MSMEs,  credit-plus  services  for  handholding  of  all  borrowers  including  MSMEs  to enable  access  to  finance  and  enhanced  bankability  of  proposals  etc.  The  reform agenda comprehensively encourages  demand for credit by MSMEs.

To  further  support  MSMEs  Government  has  reduced  corporate  tax  to  25%  for  all MSMEs with turnover upto Rs.250 crore.  In addition, to encourage formalisation of the MSME  sector,  Reserve  Bank  of  India  (RBI)  has  allowed  banks  and  Non-Banking Finance Companies (NBFCs) to classify their exposure, as per the 180 days past due criterion, to all MSMEs with aggregate credit facilities upto Rs.250 million , including those  not  registered  under  GST,  as  a  standard  asset  subject  to  certain  conditions. Small  Industries  Development  Bank  of  India  (SIDBI)  has  onboarded  525  Certified Credit  Counsellors  (CCCs)  since  October,  2017  to  extend  credit  advisory  and handholding services to MSEs.

As per MSME-Pulse Report June, 2018, prepared by TransUnion CIBIL and SIDBI, Micro (credit exposure less than Rs.1 crore) and SME (credit exposure in the range of Rs.1 crore to Rs.25 crore) exhibited Year on Year (y-o-y) growth of 22.2% and 12.8% respectively between March, 2017 and March, 2018.   Credit to MSME has continued to grow at a pace of 9.27% in March, 2018, 8.35% in April, 2018, 8.39% in May, 2018 on y-o-y basis.