The Reserve Bank of India (RBI) had set up an expert committee under former SEBI chairman UK Sinha to advise on long-term solutions for the economic and financial sustainability of the MSME sector.
As per reports, RBI announced the panel a day after it the allowance of a one-time restructuring of existing debt up to ₹25 crore for the micro, small and medium enterprises (MSMEs) that have defaulted on payments, but the loans given to them have continued to be classified as standard assets.
The central bank said in a statement that the eight-member committee will examine the factors affecting the timely and adequate availability of finance to the sector and submit its report by the end of June 2019.
The statement also said that the MSME panel has been asked to review the current institutional framework in place to support the MSME sector and study the impact of the recent economic reforms on the sector. It will also study the global best practices with respect to MSMEs and recommend their adoption in India, wherever appropriate, and would also review the existing MSME-focused policies and its impact on the sector.
The panel has also been asked to propose measures for leveraging technology for accelerating growth of the sector and suggest long-term solutions for the economic sustainability of the MSME sector.
The RBI said that it is essential to understand the structural bottlenecks and factors affecting the performance of the MSMEs, which contribute around 40 per cent to India’s export and 45 per cent to the country’s manufacturing sector.