New Delhi, Oct 27 (KNN) The government  recently announced  a capital infusion plan of  Rs2.11-lakh-crore  for state run banks to increase cash flows in the Micro, Small and medium Enterprises(MSMEs) sector, the move once implemented will help the sector in the present turbulent times, Indian Industries Association said.

The government recently announced that  the banks will launch special products and campaigns to finance the various clusters of MSMEs under the Mudra Yojana.

Sunil Vaish, President of Indian Industries Association (IIA) told KNN that MSMEs, which mainly run on cash transactions are facing the problem of cash flows. He said demonetization triggered the cash crunch in MSME sector and GST aggravated the problem further. The liquidity and demand has been slashed in market due to GST .

Also the sluggish real estate sector is also one of the underlying factors that MSMEs don’t have access to easy credit. Textile, food processing and consumer durables sectors are hardly hit.

Vanish informed that the Pradhan Mantri Mudra Yojana (PMMY) has given solace to the MSMEs. The loans up to 10 lakhs under this scheme have helped the MSMEs to expand  businesses.

On recent government policies to infuse capital in the banks he said this is commendable move by the government as banks are facing the issues of bad loans and NPA (Non performing Assets) and are hesitant to give loans to the MSMEs Vaish opined that this infusion will lead to the growth in cash flows to the MSME sector.

Vaish suggested that government should revive the state run banks by infusing more capital and simplify the GST filling process. (KNN/AG)