CAPC being formed for defaulters of loans | MSME Minister makes announcement at Super SME Awards


Micro, Small and Medium Enterprises (MSME) should stop worrying about being declared as non performing assets (NPA) if they fail to repay loan for three months. MSME Ministry in collaboration with the Finance Ministry has worked out a plan for ease of business of MSMEs. The scheme covers not only loans under Rs 10 lakhs […]


Kalraj Mishra 1Micro, Small and Medium Enterprises (MSME) should stop worrying about being declared as non performing assets (NPA) if they fail to repay loan for three months. MSME Ministry in collaboration with the Finance Ministry has worked out a plan for ease of business of MSMEs. The scheme covers not only loans under Rs 10 lakhs but over and above this amount as well.

The announcement was made by the Union MSME Minister  Kalraj Mishra at Super SME Awards organized by SMEpost.com & WASME at a glittering function on July 9 evening. Speaking as Chief Guest,  Mishra said the Government was forming a Corrective Action Plan Committeee (CAPC) to help out defaulters of loans above Rs 10 lakh. The Committee is likely to be formed soon.

A default in repayment of loans for three months so far, used to lead the banks to declare the defaulting units as NPA. Big industrialists used to default and still get away with it whereas more vulnerable MSMEs were being made to bear the brunt. But, not any more, the Minister said. If the defaulting unit feels that it is under threat of being declared an NPA, it could contact the MSME. General Managers of lending Banks were authorized to relax the conditions at their level only for loans uo to Rs 10 lakh. But, for amount greater than this, only CAPC will be authorized to grant relief. A number of factors will be taken into account before restructuring loan conditions.

Mishra has said that the small entrepreneurs across India deserve greater recognition for their stellar contribution to the Indian economy. SME is called engine of the development. He said there was a thought to make SMEs the backbone of Indian economy but for a long time it remained a thought only. People were lost in the glamour and big money of big industries and SME sector had to take a back seat. Entrepreneurship tendencies weren’t harnessed among the youth. They remained focused only on somehow getting a job in a big industry. Innovative idea of generating entrepreneurship could not blossom.

The Minister said, “Our Prime Minister is visiting Africa. I too went to south Africa sometime ago. People there complained of been crippled by the big industries. They are trying to rejuvenate SMEs. I told them of schemes launched by us like easy loans, technological upgradations, new machines, quality improvements – they were surprised at our schemes and seemed inclined to emulate”.

Kalraj Mishra-2It was former Prime Minister Atal Behari Vajpayee who had first thought of strengthening the SME sector, Mishra said. His concern was how to use global technological advancements in improving small industries. That is why he set up a separate ministry and appointed Vasundhara Raje as incharge of this ministry. MSME Act was enacted by the Parliament in 2006 followed by constitution of a MSME Task Force. Procurement policy was formulated. We are constantly working on ease of doing business – through improving process and improving system. Then only 3.60 crore units were there of which only 22 lakh were registered. Even out of this miniscule number  7 lakh units were non-functional, the Minister said.

Narendra Modi on becoming the Prime Minister, found out that the country had a large contingent of unemployed youth under 35 years of age. Feeling that such large number of people can’t be provided employment en mass, he decided to turn them into entrepreneurs. Mishra said, that is why he coined the slogan – Make India a manufacturing hub. Then came Make in India campaign to bring in investments including FDIs.

The Minister said, “Our manufacturing is good but we should be able to compete globally. Biggest exporter of manufactured goods in the world is china. But there are issues about its quality. So why don’t we work on this aspect. Our products should not only be good in quantity to compete with China but also quality so as to win people’s trust. Globally people need to see Made in India stamp and say – this has to be a quality product. That is why PM called out for Skill India – only skilled manpower can improve the quality.”

There is another issue of pollution. We have to take care of the environment. That is why MSME Ministry has started a zero effect, zero defect policy. To bring about radical change skill development work needs to be started at both district and regional levels. Skill mapping and industrial profile is being readied to have better manufacturing. MSME Ministry has taken it up on priority basis, Mishra said.

Procurement policy is being monitored by me and Secretary, MSME. At least 4  per cent goods were supposed to be purchased from SC and STs, the Minister said adding, “we are trying to put everything online. Not only applications but also interviews will be done online. District task force will meet at least once every month. It was never like this. Working on Digital platforms not only removes burdles, speeds up the process but also ushers in greater transparency whether it is business to business (B2B) and business to consumers (B2C)”.

He congratulated the winners of Super SME Award attributing their success to their innovative ideas and implemention of  our various Government schemes in their units – be it design technology, lean technology or technological upgradation. He vowed to remove all hurdles being faced by small and micro industries.

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