Lack Of Updated MSME Data Hampering Timely Funds Disbursal
Though government runs a host of schemes to support micro small and medium enterprises (MSMEs), which have faced the maximum brunt of the Coronavirus-induced lockdown in 2020, providing them timely and adequate funds becomes a roadblock, a fact which has been acknowledged even by the Finance Ministry.
Funds are provided to MSMEs by the ministry under various centrally-backed schemes like the credit guarantee scheme, MUDRA scheme and collateral-free loan scheme for street vendors among many others. However there have been problems of timely financial assistance not reaching these small sector units, which defeats the very purpose for which these scheme were formulated.
What is the reason behind MSMEs not getting timely financial assistance?
One of the biggest roadblocks in providing adequate and timely funds to MSMEs is the non-availability of reliable and consolidated data about them.
According to the National Sample Survey's (NSS) 73rd round, which was held way back in 2015-16 by the National Sample Survey Office (NSSO), there are 6.34 crore unincorporated non-agricultural MSMEs in the country which are involved in various economic activities.
In other words, government is providing assistance to MSMEs on the basis of data which was prepared on a survey conducted seven years ago!
What Government says
Official sources said that since 2017, even the MSME figures which resulted from that survey, have not been revised, which implies that no new entrepreneur or even street vendor for that matter has been added in the country in the last five years.
Interestingly the definition of MSME was revised in 2020.
Finance Ministry on its part has said that ever since the MSME survey was held in 2015-16, the definition of MSME has underwent changes, therefore there is a need to conduct a fresh survey to estimate the number of MSMEs in the country along with the assessment of credit requirement for the sector.
Official sources further said that the last all India MSME census for the year 2006-07 was carried out by the Ministry of MSME in 2009, which was published in 2011-12.
Interestingly, according to data given by various organisations, which was even acknowledged by the Parliamentary Standing Committee on Finance, more than 70 per cent of MSMEs are still not part of formal economy and functioning as informal entities.
Therefore government's lending schemes are benefitting only a small number of MSMEs and that too with numerous issues, the Parliamentary panel noted while acknowledging the data.
