MSME Credit Growth for Jan-Nov 2022 is Crosses 30 per cent CAGR

Finance Minister, on Tuesday, started the Budget Session 2023 with her presentation of the economic survey 2022-23. Every Year, Economic survey, a detailed report by state of the national economy in the financial year that which is ending, is presented in Lok Sabha.

This year’s economics survey revealed that the credit growth to the MSME sector has been remarkably high, over 30.5 per cent, on average, during Jan-Nov 2022, supported by the extended ECLGS of the central government. The Year-on-Year growth in credit since the January-March quarter of 2022 has moved into double-digits and is rising across most sectors.

The survey also mentioned that governments AatmaNirbhar Bharat Package, has been a great step to decrease the economic impact of the pandemic on MSMEs. It said, “Some of the other measures undertaken include the modification of the definition of MSMEs; the provision of INR 20,000 crore subordinate debt for stressed MSMEs, INR 50,000 crore equity infusion through Self Reliant India fund; the waiving of the global tender requirement for procurement of up to INR 200 crore.”

Stressing of the success of Udyam Portal Registration, the survey added that registration numbers have crossed a mark of 10 million and which is more than the total registration done in the past 14 years.  

“As of 7th January 2022, the portal has a total registration count of 1.32 crore, of which 1.27 crore have been classified as micro-enterprises. Enterprises registered on the portal employ 9.6 crore people, of which 2.3 crore are women. There are 1.5 lakh exporting units, which have contributed a cumulative ?9.7 lakh crore worth of exports. Similarly, ‘CHAMPIONS’ a single-window grievance redressal portal for MSMEs launched by the Ministry of MSME in June 2020 received 56,825 grievances as of 16th January 2023, of which 55,878 grievances have been responded to. The portal continues to be improved through initiatives such as the localisation of the portal in 11 regional languages and the introduction of a Chatbot,” the survey added.

Emergency Credit Line Guarantee Scheme, launched in May 2020, is a scheme to provide collateral free loans to business, especially MSMEs. Mentioning ECLGS, the survey stated, “Data from the National Credit Guarantee Trustee Corporation (NCGTC) showed that 1.2 crore MSME units availed the ECLGS scheme and raised collateral free resources to the tune of INR 3.6 lakh crore.  Another report CIBIL report showed that 83 per cent of the borrowers who availed of the ECLGS were micro-enterprises, and more than half of these borrowers had an exposure of less than INR 10 lakh.

According to the survey, More than 32.7 lakh street vendors have availed of a first loan of INR 10,000 under the PM SVANidhi Scheme, of which more than 6.9 lakh took a second loan of INR 20,000. The increasing number of GST taxpayers, from 70 lakh in 2017 to more than 1.4 crore in 2022, indicates the expansion in formal businesses.

Overall Gross Value added share has seen a number of ups and down in recent years. The contribution of the MSME sector to overall GVA was 30.5 per cent in FY 20 while it fell to 26.8 per cent for FY 21. However, this year economic survey did not mentioned the overall GVA contribution of MSMEs.