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Govt to rehabilitate sick SMEs: Minister

February 20, 2009 16:11 IST

Asserting that it is committed to rehabilitating sick small and medium enterprises, the government said on Friday for this purpose, it would soon implement the recommendations of K C Chakrabarty committee, which was formed to look into the issue.

Replying to supplementaries during Question Hour in Rajya Sabha, minister for micro, small and medium industries Mahavir Prasad said the RBI had in September 8, 2005 issued guidelines relating to debt restructuring mechanism for SMEs, based on the 'policy package for stepping up credit to SMEs' announced by the Centre the same year.

"As the government is concerned towards rehabilitation of SMEs, we are currently studying the recommendations of the K C Chakrabarty committee, which was formed to suggest measures to revive these units. The moment the recommendations are cleared, they will be immediately implemented," he said.

Prasad informed the House that the panel was formed after a Standing Advisory Committee on Flow of Institutional Credit to the MSME sector in RBI had observed in January 2007 that there was considerable delay in rehabilitation of potentially viable units, mainly on account of the inability of the promoters to bring in additional contribution.

Despite several sick units, the production share of SMEs is 45 per cent and accounts for 40 per cent of the total exports of the country, he said.

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