Advances to MSMEs decline

Advances to micro, small and medium enterprises (MSMEs) have witnessed a declining trend in Madhya Pradesh due to low off-take from the agro-based industries. Advances to the MSME sector have slipped by 5.86 per cent as in June 2008 from Rs 5,772.97 crore to Rs 5,445.06 crore.

“After the loan waiver and debt relief scheme the banking sector has witnessed low credit off-take in each sector,” a well-placed banking professional told Business Standard. However, industry sources have said banking credit is still a distant dream for many small-scale industries. State government support is negligible in this field. “A state entity like Madhya Pradesh State Electricity Board (MPSEB) issues a Rs 2 lakh estimate for power connection for a small-scale unit with seed capital of Rs 10 lakh in rural areas. As a result, it becomes very difficult for a self-employment seeker to start the industry,” a member of Madhya Pradesh Laghu Udyog Sangh said.

Add to it, poor infrastructure in industrial areas and growth centres in close proximity with rural areas restricts the growth of the SMEs in Madhya Pradesh, the member further said, adding: “Obtaining a plot or sheds for the MSME in Madhya Pradesh is a tough task. And if a industry acquires a land area, stamp duty rates are next hurdle, which are exorbitant and even the highest in India.”