Here's Why Nitin Gadkari is Pushing MSMEs to Get Listed
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Union minister for road transport and highways, shipping and micro, small and medium enterprises, Nitin Gadkari, on Friday said micro, small and medium enterprises (MSMEs) should get listed on stock exchanges in order to grow and lighten the burden on lenders.
The government aims to increase the contribution of MSMEs towards the country’s gross domestic product (GDP) to 50 per cent in the coming five years from the current 23 per cent and boost exports by them exponentially.
The push from the minister comes at a time when the government is desperate to up the GDP growth rate which fell to 5 per cent during the first three months of the current financial year. Meanwhile, finance minister Nirmala Sitharaman last week announced that lenders should not declare any stressed MSME loan as non-performing asset till March 2020 and look to recast their debt. This is expected to put pressure on lending institutions which are already facing challenges as the process of resolution of bad loans have moved at snail’s pace.
Benefits for MSMEs
The government’s push to list MSMEs will help these companies to get public money to expand their businesses to global level and reduce dependence on lenders. Listing also brings in more credibility to the organization along with ushering in highest level of corporate governance and accountability.
Expanding business to global level will mean higher export, which in turn will help the economy through revenue generation. It will also help these companies to get overseas investors. The move will strengthen business ties and investors will get good returns on their investments.
“To ensure easy credit to the sector, developing a digital credit rating system is the need of the hour, adding that the government is in talks with the World Bank, Asian Development Bank (ADB) and German bank KFW to set up a credit line for MSMEs,” Gadkari said at an event on Friday.
The minister focused on the importance of investing in research, technology and innovation to find practical solutions for India's fluctuated social and financial issues.
He added, “The role of entrepreneurship is foremost on the path of driving the Indian economy towards $5 trillion economy. With the active help of these wealth creators, revenue generators and employment creators, we are sure we will be able to accomplish this dream.”