MSME BUSINESS CONFIDENCE @LOW

Business confidence of MSMEs for the January-March quarter is still low despite the fact that budget has addressed many key issues, a CII survey said. High interest rates were shown as major concern among majority of MSMEs, the surcey said. "The overall Business Confidence Index of MSMEs for the fourth quarter is estimated at 52.9. though the Budget addressed many key issues for the MSMEs, however the index still remains relatively low," it aid. It also said that the services sector is expected to fare far better than the manufacturing. "Key factor that has led to MSMEs in services sector to perform better, is manufacturing sector’s higher reliance on credit from various lenders," it said. The survey said that an area of concern is the steep decline in expectations from the manufacturing sector. "High interest rates were shown as the major concern amongst many MSMEs," it added. It said that there is an urgent need to look into issues like synergising relationship between the small, medium and the large industry and the implementation of the Public Procurement Policy, besides promoting foreign direct investment by NRIs in the sector. To encourage Micro, Small and Medium Enterprises (MSME) sector, the government in the Budget has proposed continuing non-tax benefits to these units for three years even after they graduate to a higher category. The MSME sector employs over 60 million people in about 2.61 crore units. It contributes about 40 per cent to the country's total exports and about 45 per cent to the manufacturing activities.