Acknowledging credit availability is a challenge for MSME sector, Finance Minister Arun Jaitley yesterday said amendments to the Companies Act 2013, which is being considered by Parliament, will help ease institutional fund flow to the sector. One of the key challenges for micro, small and medium enterprises (MSME) sector, which can be termed as backbone of Indian economy, is credit flow, he said, after launching MSME Database portal and Finance Facilitation portal.
"The Companies Act passed in 2013, there were provisions like related party transactions, which resulted difficulties for MSME sector. The amendment to the Act is before Parliament and it is considering that Amendment Bill. Despite this, the sector is growing," he said. Earlier this year, the government introduced a bill to further amend the Companies Act as part of efforts to address difficulties faced by stakeholders and improve the the ease of doing business in the country. Noting that MSME creates several times more jobs than the organised and large corporate, the Finance Minister said, it is effort of the government to create conducive environment for the sector to grow.
The government is committed to ease of doing business and passing of the GST will also be a step towards this direction, he added. The constitutional amendment bill on GST passed by both Houses of Parliament was by consensus, he said, adding this has sent the right signal to the global community and changed the global perception of India. Despite slowdown in global economy, he said, India is growing rapidly.
There were questions on what's India's appetite for reforms and to keep pace of reforms but various initiative taken by the government like formation Monetary Policy Committee, enactment of Aadhaar Act and Bankruptcy code have sent important signal to the world, he added. Speaking at the occasion, MSME Minister Kalraj Mishra said, MSME Database portal will not only help save the efforts and money required for physical census but will also enable the MSME units and the various association to furnish data on a clock of the button and sitting in their units.
It will provide real time information on various types of the MSMEs registered on the databank, he said, adding a decision has been taken that no grant or subsidy will be given to any MSME unless the data is captured in the portal. Minister of State for MSME, Giriraj Singh said, the passage of GST will go a long way in ease of doing business and strengthen the MSME sector.