MSMEs to lead the current phase of consolidation: Finance Minister Arun Jaitley
Union Finance Minister Arun Jaitley (right) and Economic Affairs Secretary Subhash Chandra Garg during the launch of CriSidEx, a sentiment index for micro, small and medium enterprises, in New Delhi on Saturday. (Express photo by Tashi Tobgyal) Union Finance Minister Arun Jaitley (right) and Economic Affairs Secretary Subhash Chandra Garg during the launch of CriSidEx, a sentiment index for micro, small and medium enterprises, in New Delhi on Saturday. (Express photo by Tashi Tobgyal)
Terming the MSME sector as the backbone of the economy, Finance Minister Arun Jaitley on Saturday said the sector would lead the current consolidation phase of the economy. “Having gone through a series of very major structural reforms in the past two years, this now also is a phase for consolidation as far as the economy is concerned. And this phase of consolidation will also be led by the MSME sector,” Jaitley said.
Speaking at the launch of the CriSidEx or CRISIL-SIDBI MSE Sentiment Index, the sentiment index for micro and small enterprises (MSE), Jaitley said that such index data would help the policymakers to make necessary changes for the MSME sector, adding that the health of the sector is “extremely vital to the economy”.
Pointing out that it is one of the largest employers, he said, “this is one sector where people not only exhibit their entrepreneurial skills, become part of large value chains but then also become job creators in the process.” That is the reason why the bulk of the jobs in manufacturing, trading have been created in this particular sector, he added.
CriSidEx, developed jointly by CRISIL and SIDBI, is a composite index based on a diffusion index of 8 parameters, and measures MSE business sentiment on a scale of 0 (extremely negative) to 200 (extremely positive). “This objective index will be of some use to the individual companies but certainly it will be of much greater use as far as policymakers are concerned so that the necessary changes can also be brought in, in order to ensure that the government continues to perform its role as a facilitator as far as the sector is concerned,” he said.
“It is extremely important issues of concern of this sector regularly come to the notice of the policymakers itself and I see a great value in this index as much as in the series of the data, the series of sentiment, which will show, what are the challenges to that sector, what are the strength of that sector, what is the cause of optimism, where is is that the shoe pinches itself,” he added.
Economic Affairs Secretary Subhash Chandra Garg said that the MSE index is timely as lot of people say that MSME sector has been impacted after demonetisation and GST. “This is very much timely as lot of people say after demonetisation and GST, one segment of the businesses which was impacted quite a lot, it is true. What we intend to see this survey to bring out is that these big measures which have been taken, did they facilitate transition of the MSME to more formal businesses. That is what is I think the heart where MSME should be able to meet the credit needs,” he said, adding that the sector plays a crucial role in employment generation.
On the Budget announcement of linking Aadhaar with enterprises, Garg said it will facilitate their process towards formalisation and make it easier for enterprises to file returns. “Lot of them talk about 6-7 crore fundamental enterprises in the country, if they get their online ID from Aadhaar as an enterprise ID that will also facilitate their process towards formalisation and will also facilitate their ease of doing business. With one single enterprise ID it is possible that 26-27 business registration will not be required. And it will be possibly much easier to file their returns,” Garg said.
Speaking on the same occasion, Financial Services Secretary Rajiv Kumar said the launch of index is very timely because the government has really enabled MSME in terms of credit needs and taxation relief in the last 4-5 months. “In respect of Udayami mitra I would say it’s virtual platform now and 3,300 cases have been sanctioned amounting to Rs 750 crore in the last 4-5 months,” Kumar said.
Talking about benefits of index, SIDBI chairman and managing director Mohammad Mustafa said it would be an accurate barometer of on-the-ground trends — given that not much statistical light emanates now from MSE geographies — and play an important role in addressing financial and developmental gaps in the MSE ecosystem.
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