New Delhi, Sept 2 (KNN) The end July, credit data released by RBI shows that credit offtake by the MSME sector has shrunk by more than 5% over a year.While the ‘Medium’ sector credit off take is chronically going down, a decrease of  nearly 9% over the last 12months. The micro and small sector which  had increased  the credit off take during the previous year, also met a reduction in credit of nearly 3%  during the current period.

At this juncture it may be remembered that some time back,  a task force of the  then ‘Prime Minister’ instructed banks to achieve 20% year on year growth in credit to the MSE sector. While that target was never achieved, there was some growth trend so far, which now has reduced to negative.

Commenting on the scenario, Dr. Sangam Kurade, President FISME, the leading federation of India MSMEs, commented “this is no surprise for us. In fact we were expecting a poor show”.

Elaborating on the issue, Dr. Kurade mentioned that the restrictive third party rating based credit  policy of the RBI is playing havoc with MSME sector,  in expansion of capacity and enhancement of business. He also mentioned about the draconian clauses of the Rehabilitation Schemefor MSMEs, where any enterprise defaulting for even one month is on the watch list and a ‘no-no’ for banks  for additional credits.

The RBI data released also show that overall bank credit growth reached a ‘respectable’ figure of 7.7% only by virtue of the increase in credit to service sector and personal loans, which constitute about half of the total Bank credit  in India. However, the moot question here is how the Government and RBI is promoting the much hyped ‘Make in India’ mission of our Hon’ble Prime Minister, when  the credit growth for the entire manufacturing sector is near to zero during the last one year.

While the relinquishing RBI Governor can continue harping on his cleaning of Bank credit books, will the new incumbent will pull the throttle of ‘Growth Mode’??? We await....... (KNN/ DB)