High cost hinders growth of MSME sector

NEW DELHI: The high cost of credit and non-availability of raw material at competitive rates are the major impediments in the growth and development of the MSME sector, which contributes about 45 per cent to the country's total manufacturing, a survey said.

The government should promote modern technology, create infrastructure and simplify labour laws for micro, small and medium enterprises (MSME) to help growth and development, the CII MSME survey said.

An overwhelming 80 per cent of the 100 participants said high cost of credit was the biggest impediment in the growth and development of the MSME sector.

About 55 per cent said that procurement of raw material at competitive rates and delayed payment along with lack of availability of credit are also crucial factors that inhibit growth and development of MSMEs, it added.

CII National MSME Council and MSME Ministry will jointly prepare a 12-point agenda to address the issues related to finance, regulatory framework, capacity building, environment and business development.

MSME sector, hit hard by the global economic slowdown, employs about 60 million people and contributes about 40 per cent to the country's total export. There are about 2.61 crore units in the sector.