KASSIA calls for effective implementation of ‘loans under 59-minute’ programme for MSMEs

New Delhi, Feb 3 (KNN) The Union Budget 2022-23 makes a sincere attempt to drive micro, small and medium enterprises (MSME) growth in the pandemic environment, through measures such as extending emergency credit line guarantee scheme (ECLGS) till March 2023, increasing guarantee cover by an additional Rs 50,000 crores up to total 5 lakh crores under CGTMSE, and boosting domestic manufacturing in defense sector.

Karnataka’s small-scale industry body, KASSIA, in its pre-budget memorandum to the Finance Minister mentions effective implementation of the ‘loans under 59-minute’ programme for the micro, small and medium enterprises (MSMEs) sector.

The memorandum presented by KASSIA says The PM’s initiative of providing loans through the 59 minutes window online is only on paper. 

It is hardly possible to access loans under this scheme, as banks place hurdles after giving in-principle acceptance online. It should be mandated that Banks display on notice boards statistical information of loans disbursed under the scheme. KASSIA suggested.

State Level Bankers' Committee (SLBC) should be entrusted with the power to monitor the scheme it added in its suggestion.

KASSIA expressed its gratitude to the Finance Minister for accepting suggestions made by them in its pre-budget memorandum. 

However, separate guidelines for eligibility criteria to avail ECLGS could have been formulated, the association said in its press release. 

MSMEs can look forward to a better ease of doing business and easier regulatory compliance due to inter-linking of various portals such as Udyam, e-shram, NCS and Aseem, and hope the organic databases in them providing services such as credit facilitation, will actually enhance up entrepreneurial opportunities and reduce red-tape.

However, our suggestion for soft loans at 4% to MSMEs could have been considered keeping in view the challenges  from the pandemic, KASSIA said. 

The online bill system proposed to reduce delayed payments from central ministries and introducing surety bonds to reduce indirect cost for suppliers, will be keenly watched for its effectiveness, KASSIA said, while welcoming the cut in custom duty on certain products.

Expressing the hope that introduction of a new digital rupee by the RBI will lead to reduction in transaction costs, KASSIA also hailed the thrust on national highways, rail network, cargo terminals and expressways. (KNN/AT)