Ease of Doing Business for MSMEs: Karnataka Government’s industrial and investment promotion agency, Karnataka Small Scale Industries Association (KASSIA) has appealed to the union government to announce soft loans at four per cent interest to the small industry, as per a report by Knowledge and News Network (KNN).
KASSIA’s response came after the statement made by Bhanu Pratap Singh Verma, Minister of State, Micro, Small and Medium Enterprises (MSMEs) Ministry at an industry forum recently.
“It is possible only if the Centre incentives the sector’s growth by providing it timely financial assistance at 4 per cent like how the government funds the farm sector,” said K.N. Narasimhamurthy, President, KASSIA while welcoming the Minister’s stand on doubling the contribution of the MSMEs.
KASSIA’s chief also highlighted the biggest challenge for a micro or a small entrepreneur which is to contend with thin margins due to the highly competitive business environment.
“Adding to this problem is the fact that a majority of the MSMEs are contractually bound to not increase the price of their supplies,” he said. The increasing input costs will further put their margins under pressure, the report noted.
“So if they can access funds at lower interest like 4 per cent it will help to protect their margins and help to survive in the market,” suggested Narasimhamurthy.
Expressing concern over the shut down of MSMEs, he further said, “otherwise, many of them might decide to close down temporarily or even permanently as they cannot sustain their overheads.”
Earlier in 2020, former MSME Minister, Nitin Gadkari had set a target of increasing MSMEs’ share in GDP to 40 per cent by 2025 and in exports to 60 per cent. He also targetted creation of five crore additional jobs apart from the jump in GDP’s share to 40 per cent by 2025.
