U K Sinha Committee on MSMEs

Expert Committee under U K Sinha on Micro Small and Medium Enterprises (MSMEs) submitted its report to RBI on 18^th June, 2019. It was set up in January, 2019 to suggest long-term measures for the economic and financial sustainability of the MSME sector.

Major Recommendations

• Establishing a Rs 5,000-crore Distressed Assets Fund to make equity investments that help unlock debt or revive sick units.
• Setting up a non-profit Special Purpose Vehicle (SPV) to support crowd-funding, particularly to pave the way for a conducive business ecosystem for MSMEs.
• Doubling the limit for banks to extend loans without collateral to Rs 20 lakh.
• Introduction of voluntary certification of MSMEs that comply with prescribed internal governance standards.
• Setting up of a National Council for MSMEs at the apex level under the chairmanship of the Prime Minister, for the sake of convergence of policies and creation of a promotional ecosystem.
• Small Industries Development Bank of India (SIDBI), as a nodal agency, should ideally play the role of a facilitator to create a platform wherein various venture capital funds can participate and, in turn, create a multiplier effect to provide equity support to MSMEs.
• The ‘PSBLoansIn59Minutes’ portal, which now caters only to existing entrepreneurs, be allowed to serve new entrepreneurs, too, including those applying for loans under the Pradhan Mantri Mudra Yojana and Stand-up India.
• All credit guarantee schemes- such as the Credit Guarantee Fund Trust for Micro and Small Enterprises and National Credit Guarantee Trust Company, should be subject to RBI regulation and supervision.