NEW DELHI: In an aim to improving access to finance of micro and small enterprises in manufacturing and service sectors, the World Bank has approved a loan of $500 million. In its report, it also said that though the banking penetration in India has gone up from 35 per cent to 53 per cent between 2011-2014, it also suffers from high dormancy rates.
The government is also likely to come out with a revival plan for sick and loss-making MSMEs termed as corrective action plan. Last year in 2014, the MSME ministry had stated that the government was working on reviving as many as 4,500 of the nearly 12.2 lakh units that were declared ‘sick’ by the RBI.
The ministry is actively pursuing the public procurement policy which makes it mandatory for PSUs to make 27 per cent purchases from MSMEs from May onwards.
According to the World Bank report, the rise in number of bank accounts was to a large extent due to government’s push for financial inclusion. In August 2014 the government launched Pradhan Mantri Jan Dhan Yojana scheme for comprehensive financial inclusion with the goal of opening a bank account for every household.
“By the end of January 2015 it had led to the opening of 125 million new bank accounts; as a point of comparison, a 2013 survey had found that fewer than 400 million people in the country had an account.
Under the scheme more than 97 per cent of the accounts were opened with the public banks, but around 72 per cent of these accounts show ‘zero balances’.