LUCKNOW: Union minister of state for MSMEs and Jalaun MP Bhanu Pratap Singh Verma on Tuesday announced that the Central government is taking steps to provide credit facilities through various schemes to develop manufacturing enterprises as engines of growth for Uttar Pradesh and the entire country.
Home to about 14% of the total MSME units in the country, Uttar Pradesh contributes only 8% to the national GDP and to bolster the state’s economy, smooth flow of credit in the MSME ecosystem will be required.
Addressing the MSME Summit in the city, the Union minister said, “The contribution of MSMEs in the country's export is growing continuously with the sector accounting for almost 50% of the total exports and 30% of the country’s GDP.”
Senior banking executives, who had gathered at the summit being organised by Assocham, said the credit-deposit ratio needs to be improved in certain parts of the state.
Head of commercial and rural banking at HDFC Ltd, Rahul Shukla, said: “Banks cannot remain focused on just urban areas. We need to support non-borrowing MSMEs. The existing players have to explore private lending options and end up paying monthly interest at the rate of 3-4%.”
The country has almost 6.5 crore MSMEs out of which 90 lakh are in Uttar Pradesh. However, less than 1% units based out of UP have an annual turnover of more than Rs 5 crore.
The stakeholders listed ways through which microenterprises could be scaled up to small and medium ones. Though the overall credit-deposit ratio in UP has increased and hovers around 52%, senior banking executives pointed out that Purvanchal has been lagging behind.
Districts with lower ratios (under 41%) include Azamgarh, Ghazipur, Mau, Jaunpur, Ballia, Deoria, Varanasi, Kushinagar, Sonbhadra, and Ambedkarnagar.
On the contrary, Moradabad, Amroha, Sambhal, Shahjahanpur, Pilibhit, Mathura, Agra and Kannauj have higher credit to deposit ratio.
Additional chief secretary Awanish Awasthi, who is also the chief executive officer of Uttar Pradesh Expressways Industrial Development Authority, said: “The quality of technical education needs to be improved to achieve industrial development.”
