Credit to MSEs increases five times to Rs 1.23 lakh crore in post-GST period: Report
New Delhi, Dec 5 (KNN) In the post-GST period, credit to micro and small enterprises (MSEs) has increased five times to Rs 1.23 lakh crore, according to an SBI research report.
The credit growth to MSEs is quite stupendous post-GST, the report by SBI Ecowrap said.
The GST, which subsumed most of the indirect taxes, was rolled out in July 2017.
"The jump in credit to MSE sector bodes well regarding the formalization of the Indian economy and hence the ensuing benefits," said Ecowrap.
For the 15-month period ended post GST, the incremental credit to MSEs (under priority sector) has increased by five times to Rs 1.23 lakh crore compared to Rs 25,700 crore during corresponding period pre-GST, the report said.
According to International Finance Corporation (IFC) estimates, the potential demand for India's MSME finance is about USD 370 billion as against the current credit supply of USD 139 billion, resulting in a finance gap of USD 230 billion.
The report said even as credit growth still remains in comfort territory though slowing down, "we are now more concerned over a growth slowdown".
The deceleration in credit in pre-GST period was partly due to overall slowdown in economic activity, rising NPAs and reclassification of food and agro-processing units from MSME category to agriculture sector (as per the revised priority sector lending guidelines, 2015), it said.