Credit flow for micro & medium industries to double in 5 years says PM

The government is committed to doubling credit flow to micro, small and medium enterprises, which employ 6 crore persons and contribute 45 per cent to India's manufactured goods, Prime Minister Manmohan Singh said on Friday.

"Credit is the lifeline of any business. The government is committed to double the flow of credit to MSMEs in five years," Singh said after giving away national awards to entrepreneurs in the sector here.

The Prime Minister, who reviewed the performance and difficulties of the sector with the industry representatives on Wednesday, said public sector banks increased lending to MSMEs by 25 per cent in 2008-09.

According to estimates, MSMEs are given credit of about Rs 1,50,000 crore by PSU banks per annum. There are 2.60 crore units in the sector which contribute 40 per cent to exports.

The Prime Minister has issued directions for constitution of a task force to look into the difficulties of MSMEs and recommend steps within next three months.

He said recent global economic slowdown has had an adverse impact on the growth of Indian economy. "Micro, small and medium enterprises have also not remained unaffected," he said, adding the government has been alive to the concerns.