MSME Ministry to suggest increasing withdrawal limit to Rs 2 lakh per week for MSMEs

New Delhi, Dec 7 (KNN) Ministry for Micro Small and Medium Enterprises (MSME) will suggest for increasing the withdrawal limit to Rs 2 lakh per week for MSME sector said, Haribhai Parathibhai Chaudhary, Minister of State for MSME.

He said this while addressing at the ‘ASSOCHAM National Summit on E-Commerce for MSMEs’ held here on Tuesday.

“We need to be cashless economy to be the best in the world. The Demonetisation will help to control the fiscal deficit”, said Chaudhary.

He further said that repayment of loans by farmers is 92%, much higher than big value business loans. “Encourage MSMEs to initiate skill development for rail and defence manufacturing”, said Chaudhary.

He further said that the government is witnessing a new trend with many MSMEs taking the e-commerce route to establish themselves in the Indian market and we are using internet not only as a marketing tool but also as a tool to enable them to understand if a unique product has high demand in the market. Indian MSMEs are looking at e-commerce as an innovative tool to build fresh business models.

Chaudhary also said by adopting e-commerce MSMEs shall achieve significant advantages such as increased revenues and margins, improved market reach, access to new markets, cost savings in marketing and communication spend, customer acquisition and improved customer experience.

Addressing the event, S.N. Tripathi, Additional Secretary & Development, Commissioner (MSME), Ministry of MSME, said “We need to move fast towards digitising India.”

“Inadequacy of bank branches is one primary reason why cash dominates small businesses. Many rural branches are open for just a day or two in a week. People consider bank postings in rural India as a punishment. The smaller the enterprise, the bigger the problem”, according to a study titled, ‘MSMEs in India: The Paradigm shift,’ jointly conducted by ASSOCHAM and Resurgent India at the ASSOCHAM ‘National Summit on E-Commerce for MSMEs’ here at New Delhi.

The study highlights that the government must realise that the small scale sector will certainly pick it up (move to e-payments). But it is a gradual process. Also, it is important to acknowledge that money generated in business is not irregular. Certain issues cannot be pushed so much that the system chokes and the outcome is distorted.

Irrespective of the bright side of upcoming GST, SMEs must be mindful of its accompanying challenges such as increase in complicate costs and alignment of IT systems with new processes. Thus, for the SMEs, GST throws a mix bag of opportunities and challenges to explore, adds the joint study.