The MSME sector which contributes significantly to the Indian economy, particularly in terms of export and employment, is facing a severe financial crunch. The capital inflow for growth of the sector is much below the expectation.  As a fallout of it, the sector is languishing, observed by Baleswar MP and Member of Parliament Standing Committee on Industry Rabindra Kumar Jena.

Jena was speaking at a meeting of ASSOCHAM held recently in Delhi.

Jena said when Britishers  entered into India the contribution of our country to world market was about 45 per cent, but after 200 years of rule, when they left (India)  the contribution reduced drastically  to  mere 2 per cent as the small and medium industry sector witnessed a terrible neglect.

He  observed that although the successive Governments  had made efforts to revive  the MSME sector, which employs about 94 per cent of work force  of unorganised sectors,   yet failed to yield any substantial  result  due to various factors. One of the major reasons for plugging of MSME sector is unavailability of capital. The shortfall in the flow of credit is around Rs 32.5 trillion in the sector, as per various World Bank reports, Jena maintained.

“About two and a half decades ago although liberalization has taken place in India and several reforms were effected, yet unfortunately no tangible change is witnessed in the MSME sector. The liberalisation leverage has been availed by the corporate sector but the MSME sector continues to suffer with the bottleneck of credit inflow. For revival of the MSME sector, the need of hour is a better legislative and regulatory environment, besides finance and market,” said Jena.