Many MSMEs either shut down or sick due to shortage of funds

A number of MSME units across the country have either shut down or became sick due to inadequate funds, power shortage, high cost of capital and recession, Parliament was informed today.
As per the data compiled by Reserve Bank of India from scheduled commercial banks, the position regarding the number of sick MSMEs in the country at the end of March 2014 is 4,68,399, Minister of State in the MSME Ministry, Giriraj Singh said in a written reply to the Lok Sabha.
According to the latest Census wherein the data was collected till 2009, and the result published in 2011-12, number of closed MSMEs in the registered sector was 4,96,355 at the end of March 2007.

RBI, in its circular issued on November 1, 2012 had directed banks to provide non-discretionary one time settlement (OTS) to non-viable sick MSMEs.
As per RBI data, 3,58,088 sick MSEs have been identified as potentially non-viable at the end of March 2014.
MSME sector contributes 8 per cent of GDP and accounts for around 40 per cent of the total exports and around 45 per cent of the manufacturing output.
As per the fourth All India Census, total number of enterprises in the MSME sector is 361.76 lakh, of which 15.64 lakh are registered enterprises.
The sector provides employment to 805.24 lakh persons and is the largest job provider after agriculture.