Exim Bank asks government to redefine MSMEs
Updated: May 24, 2013 01:59:37pm
Mumbai, May 24 (KNN): Export-Import Bank of India (Exim Bank) has asked the government to revise the definition of micro, small and medium enterprises (MSMEs) to make exports more competitive.
The state-owned export promotion bank said that there was a need to classify larger businesses as MSMEs as international rivals in this segment were giants compared to Indian entities.
"The present definition of MSME is an outdated one. In India , a medium-sized business is one below Rs 10 crore whereas in the US and Europe it is $50 million (nearly Rs 280 crore) and 50 million euros (over Rs 350 crore), respectively. Even in other Asian countries, the size ranges from Rs 80 crore to Rs 150 crore," Exim Bank Chairman TCA Ranganathan said here yesterday.
In terms of the MSME development Act 2006, manufacturing entities with investments of up to Rs 25 lakh are classified micro while small enterprises are those with investments between Rs 25 lakh to Rs 5 crore, and medium enterprises are those with investments up to Rs 10 crore.
In the case of services firms, the MSME limits are Rs 10 lakh, Rs 2 crore and Rs 5 crore, respectively.
Meanwhile, Exim Bank reported 10 per cent rise in net profit at Rs 742 crore for the year ended March 2013 due to growth in project loans and diversification in exports in South Asia and Africa.
The bank's total business crossed Rs 1,37,774 crore during the reporting year. "It was a bit of an interesting year and also quite challenging at times. For the first time we witnessed the entire Europe showing an absolute fall in growth with their imports turning negative.
"This had impact on both world trade and us. But despite these turbulences we came out respectably well," Ranganathan said.
He said that the project exports have grown over the last year because of a strong diversification into Africa and South Asia. “We also think given the nature of our exports, we need to have a stronger focus on potential areas of world demand," he added.
During the year, the Bank secured a 20 year loan of € 150 million from the European Investment Bank to support projects that contribute to climate change mitigation. The Bank also began drawals under a USD 100 million loan from Asian Development Bank, to be used to support SMEs and SME clusters in the less developed states for technology up gradation. (KNN)
The state-owned export promotion bank said that there was a need to classify larger businesses as MSMEs as international rivals in this segment were giants compared to Indian entities.
"The present definition of MSME is an outdated one. In India , a medium-sized business is one below Rs 10 crore whereas in the US and Europe it is $50 million (nearly Rs 280 crore) and 50 million euros (over Rs 350 crore), respectively. Even in other Asian countries, the size ranges from Rs 80 crore to Rs 150 crore," Exim Bank Chairman TCA Ranganathan said here yesterday.
In terms of the MSME development Act 2006, manufacturing entities with investments of up to Rs 25 lakh are classified micro while small enterprises are those with investments between Rs 25 lakh to Rs 5 crore, and medium enterprises are those with investments up to Rs 10 crore.
In the case of services firms, the MSME limits are Rs 10 lakh, Rs 2 crore and Rs 5 crore, respectively.
Meanwhile, Exim Bank reported 10 per cent rise in net profit at Rs 742 crore for the year ended March 2013 due to growth in project loans and diversification in exports in South Asia and Africa.
The bank's total business crossed Rs 1,37,774 crore during the reporting year. "It was a bit of an interesting year and also quite challenging at times. For the first time we witnessed the entire Europe showing an absolute fall in growth with their imports turning negative.
"This had impact on both world trade and us. But despite these turbulences we came out respectably well," Ranganathan said.
He said that the project exports have grown over the last year because of a strong diversification into Africa and South Asia. “We also think given the nature of our exports, we need to have a stronger focus on potential areas of world demand," he added.
During the year, the Bank secured a 20 year loan of € 150 million from the European Investment Bank to support projects that contribute to climate change mitigation. The Bank also began drawals under a USD 100 million loan from Asian Development Bank, to be used to support SMEs and SME clusters in the less developed states for technology up gradation. (KNN)
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