MSME rating system not on cards
Replying to a question in Rajya Sabha, MSME Minister Narayan Rane said that the government doesn’t have any plans to implement a rating system for monitoring micro, small, and medium enterprises (MSMEs). This position is in stark contrast to what the former MSME Minister, Nitin Gadkari, had said – the government is in process of setting up an MSME rating process to enable small businesses to access bank loans on the basis of the ratings. Gadkari spoke of a ‘digital data-based credit ratings’ for MSMEs to enable them to get bank loans on the basis of the ratings. The government was also expected to buy 15% of the amount raised by them from public markets as equity stakes. The idea was to encourage MSMEs to raise money from public markets.
Image credit: Pexels
It is important to note that the erstwhile Performance & Credit Rating Scheme of the MSME Ministry was discontinued in December 2018. The MSME rating scheme was intended to offer a third-party opinion on MSMEs’ capabilities and creditworthiness in order to create awareness among them about the strengths and weaknesses of their existing operations.
Separately, in another reply, Rane said that 23,948 MSMEs had registered in the erstwhile scheme with the intent to adopt the principle of the Zero Defect Zero Effect scheme. The scheme was launched by Prime Minister Narendra Modi in October 2016 to encourage the manufacturing of goods by MSMEs without any defects and without any effects on the environment. It aimed at enabling MSMEs to use the latest technology to bring out quality products, enhancing competitiveness in manufacturing, and boosting exports.
Source: Financial Express