MSME Crisis: Exporters’ Body Knocks FinMin’s Door, Seeks Extension Of Credit Scheme

 Indian exporters have sought the Union Government’s intervention in providing affordable and easy availability of credit to MSMEs amid global headwinds due to a lack of liquidity.

The Federation of Indian Export Organisations (FIEO), the apex exporters’ body, has written a letter to Finance Minister Nirmala Sitharaman, requesting an extension of the Emergency Credit Linked Guarantee Scheme (ECLGS) till March 31, 2024, and restoration of interest subsidy benefit of 5 per cent to manufacturer MSMEs.

In the letter, it said that some of the MSME sectors are affected due to a dip in exports on account of a global demand slowdown.

According to FIEO, extending the ECLGS “till March 31, 2024” will help micro, small, and medium enterprises sail through this difficult time and bounce back when the situation improves.

“With interest rates firming up, MSMEs are getting credit at not less than 8-11 per cent. The subvention for the interest equalisation scheme was reduced as interest rates were coming down. However with complete change in situation, there is an urgent need to restore interest equalisation benefit of 5 per cent,” FIEO said in the letter.

40 per cent of India’s total exports depend on the MSME sector.

In August, Indian exports declined 6.86 per cent to $34.48 billion, for the seventh month in a row, due to a fall in shipments from key sectors like petroleum and gems and jewellery on subdued global demand.

The trade deficit (difference between imports and exports) during the month touched a 10-month high of $24.16 billion.

Cumulatively, exports during April-August this fiscal contracted 11.9 per cent to $172.95 billion. India’s exports contracted 15.88 per cent in July.

Exports sectors, which recorded negative growth in August, include tea, coffee, rice, spices, leather, gems and jewellery, textiles, and petroleum products.

(With PTI inputs.)

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