 "MSMEs")
The emergency credit line guarantee scheme (ECLGS), launched during Covid to help small businesses tide over losses due to lockdowns, has helped save at least 14.6 lakh MSMEs which benefited from Rs 2.2 lakh crore in additional credit, a report said on Monday.
According to an SBI Research analysis, this additional credit flow has saved around 12 per cent of the outstanding MSME (Micro, Small and Medium Enterprises) credit from slipping into NPAs. In terms of people, it saved the livelihood of at least 6.6 crore people, the report said.
The ECLGS has helped in boosting credit flow to MSMEs with at least 14.6 lakh of them being saved due to the scheme.
In absolute terms, loans worth Rs 2.2 lakh crore were flown into MSMEs from banks during the scheme. This means that around 12 per cent of the outstanding MSME credit has been saved from slipping into NPAs because of the scheme, and saving the livelihood of 6.6 crore people, SBI chief economist Soumyakanti Ghosh said in the report.
The report also noted that there is evidence of MSME units becoming larger with several units crossing the threshold of Rs 250-crore turnover and turning into mid-sized corporates by the new definition of MSME units.
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With the change in MSME definition, in 2020 the government mandated all the MSMEs to register under the Udyam portal, which according to the report, is the way forward for the sector. A total of 1.33 crore MSMEs have Udyam certification now. As against this, the number of GST registration is only 1.40 crore.
The government recently launched Udyam assist platform, developed by Sidbi (Small Industries Development Bank of India), to bring all the informal micro enterprises into the formal ambit, which constitute around 99 per cent of MSMEs.
According to the report, the Udyam portal could potentially result in an MSME revolution and their entry into the ambit of formal credit mechanism and can result in around 50 million such micro units. Besides, states like Bengal, Uttar Pradesh, Tamil Nadu, Karnataka and Andhra could benefit with 2.6 crore registrations of such micro units.
The country has around 64 million MSMEs as against 140 million in China.
As per NSS 73rd round survey (2015-16), there were 6.34 crore MSMEs in the country, of which 6.30 crore or 99.47 per cent of the total were micro units, 3.3 lakh enterprises were SMEs and just 10,000 were medium units.
Of the total, as much as 3.25 crore enterprises or 52.3 per cent are in rural areas and the rest 3.09 crore enterprises or 48.8 per cent are in urban areas.
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
