MSME revenue may have exceeded pre-COVID-19 level by 25% in FY23: RBI report
The credit by scheduled commercial banks increased by 14.2% year-on-year (YoY) in 2022-23 from 11.7% in the previous year.
The micro, small, and medium enterprises (MSMEs) segment, which contributes about 29% to India’s GDP and employs over 11 crore workers, recorded a modest recovery, stated the Reserve Bank of India’s (RBI) Annual Report for FY23.
The report also highlighted the various policy measures, including the Emergency Credit Line Guarantee Scheme (ECLGS) that was introduced to support the sector from the onslaught of the COVID-19 pandemic. This aimed at meeting their liquidity needs for sustaining business operations.
ECLGS also helped MSME borrowers manage their businesses better with lower non-performing assets (NPAs) for borrowers availing the facility as compared to borrowers who were eligible but did not avail it (across all categories of micro, small, and medium industries), according to the Credit Information Bureau (India) Limited (CIBIL).
As per the report, the revenue for the MSME sector was projected to exceed the pre-COVID-19 level in 2022-23 by 25%. These MSMEs account for a sizeable share of the unorganised sector output and employment with 99.8% of them being unregistered.
During the April-December period, the credit by scheduled commercial banks increased by 14.2% year-on-year (YoY) in 2022-2023 from 11.7% in the previous year.
The report also mentioned that the Goods and Services Tax Network (GSTN) has been included as a Financial Information Provider (FIP) under Account Aggregator (AA) Framework to facilitate cash-flow-based lending to MSMEs.
The report also said that increasing the flow of credit to MSMEs has been a policy priority of the Reserve Bank and the Indian government.
Edited by Kanishk Singh
