Small businesses' credit to double in 5 years: PM

The government is committed to doubling credit flow to micro, small and medium enterprises, which employ 6 crore (60 million) people and contribute 45 per cent to India's manufactured goods, Prime Minister Manmohan Singh said on Friday.

"Credit is the lifeline of any business. The government is committed to double the flow of credit to MSMEs in five years," Singh said after giving away national awards to entrepreneurs in the sector in New Delhi.

The prime minister, who reviewed the performance and difficulties of the sector with the industry representatives on Wednesday, said public sector banks increased lending to MSMEs by 25 per cent in 2008-09. According to estimates, MSMEs are given credit of about Rs 1,50,000 crore (Rs 1,500 billion) by PSU banks per annum.

There are 2.60 crore (26 million) units in the sector which contribute 40 per cent to exports. The prime minister has issued directions for constitution of a task force to look into the difficulties of MSMEs and recommend steps within next three months.

He said recent global economic slowdown has had an adverse impact on the growth of Indian economy.

"Micro, small and medium enterprises have also not remained unaffected," he said, adding the government has been alive to the concerns. The two stimulus packages the government announced in coordination with RBI have been of some help to the MSMEs, he added.

The Prime Minister said it is important to get a clear picture of the opportunities available to and the constraints faced by MSMEs, and for this an accurate data is required.

"I believe that the fourth All India Census of this sector will provide detail information about the MSME sector," he said, adding the information will help in formulating new policies and strengthening the existing ones for effective implementation.

Earlier, Minister of State for MSME (Independent Charge) Dinsha Patel said the government has set a target to provide employment opportunities to 37 lakh (3.7 million) people under the Prime Minister's Employment Generation Programme by 2011-12.

He also said that several new components like design development clinic, marketing assistance for SME and technology upgradation activities would be added to the National Manufacturing Competitiveness Programmme.

"Soon, we will add a few more components under this programme," Patel said.

On the skill development front, he said, 2.6 lakh (26 million) people were provided training in the last fiscal.

Image: Prime Minister Manmohan Singh