Commerce and Industry Minister Piyush Goyal on Thursday urged industry representatives to share specific issues they face in accessing bank credit, adding that the government is open to exploring alternative financing models for Micro, Small, and Medium Enterprises (MSMEs).
Goyal's comments come amid concerns raised by exporters about declining bank credit, particularly for MSMEs. Although exports grew by 15 per cent in rupee terms between 2021-22 and 2023-24, the outstanding credit in March 2024 decreased by 5 per cent compared to March 2022, according to exporters.
"Give me specific details—what kinds of problems they (MSMEs) face. Is too much collateral being asked? If an ECGC (Export Credit Guarantee Corporation) cover is available, do they (banks) still ask for collateral? What kind of interest do they charge when a 90 per cent guarantee is taken by ECGC in the event of any export credit failure?" Goyal said.
"If we get more specific feedback, we will be able to take it up with the bankers. ECGC is looking at factoring services, but my personal view is that, being costlier, people will still prefer to go to the bank for a loan. However, we are open to exploring alternative financing models."
In August, the government approved 12 new project proposals under the National Industrial Corridor Development Programme (NICDP) with an estimated investment of Rs 28,602 crore to set up industrial parks and townships across India.
These projects will be located in Khurpia (Uttarakhand), Rajpura-Patiala (Punjab), Dighi (Maharashtra), Palakkad (Kerala), Agra and Prayagraj (Uttar Pradesh), Gaya (Bihar), Zaheerabad (Telangana), Orvakal and Kopparthy (Andhra Pradesh), and Jodhpur-Pali (Rajasthan).
"I am happy to commit to earmarking a particular area for MSMEs because, without MSMEs, no large industry will survive. If Toyota is investing Rs 20,000 crore in one of our industrial cities at Shendra-Bidkin, Sambhaji Nagar (Maharashtra), clearly they will need hundreds of MSMEs in their support ecosystem," Goyal said.
Goyal also criticised opposition parties for attempting to divide society based on caste, religion, and language, accusing them of creating a false narrative. "The Modi government's programmes do not discriminate against people based on caste or religion," he added.
Goyal reflected on recent election results, particularly in Uttar Pradesh, Rajasthan, Maharashtra, and Haryana, suggesting that voters felt they had let down Prime Minister Narendra Modi despite the government's achievements over the past decade.
"I think the recent election results reflected a little bit of feeling among the people, particularly in Uttar Pradesh, Rajasthan, Maharashtra, and Haryana, that they let down the Prime Minister for all the good he had done for 10 years," he said.
In the recent Haryana assembly elections, the BJP secured a third consecutive victory, winning 48 out of 90 assembly seats, well above the simple majority mark of 46. Together with its allies Shiv Sena and NCP, the BJP-led Mahayuti coalition holds a commanding majority of 230 seats in the 288-member assembly.
When asked about Maharashtra, Goyal expressed satisfaction over the upcoming formation of the new state government, which will include senior BJP leader Devendra Fadnavis as Chief Minister. "I am happy that Eknath Shinde Ji and Ajit Dada Pawar will be joining Fadnavis Ji as Deputy Chief Ministers in the government," he said.
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