National fund, procurement policy proposed for MSMEs

The government proposes to set up a `national fund' for the unorganised sector, to provide credit support exclusively to the micro enterprises. It also proposes to come up with a `procurement policy' for the medium, small and micro enterprises (MSME) sector in the country.

These are part of the recommendations of the National Commission for Enterprises in the Unorganised Sector, Dinsha Patel, minister of state (independent charge) for the ministry of micro, small and medium enterprises, said.

The fund would initially be managed by the Small Industries Development Bank of India (SIDBI) and later on a separate institution will be set up for this purpose, the minister said.

The ministry, however, found another suggestion for earmarking a separate sub-target for the MSME sector not feasible. The committee has suggested earmarking of a specific percentage of net bank credit (say, 6 per cent) for the micro enterprises under the priority sector lending targets. This needs to be considered to ensure increased access to credit by micro enterprises, the committee had said in its recommendations.

The ministry proposes to come up with a `Procurement Policy' for the MSME sector. Demand for products of micro and small enterprises has been another area of concern, especially in the present global economic scenario, the minister said.

He said the government should lay down an annual procurement target from the MSE sector for the central ministries/departments/PSUs, which will be a great support to this sector.