The parliamentary standing committee has recommended that the government take steps for the expansion of micro & small scale enterprises (MSME) in the Northeast. It has also suggested a number of measures that will expedite the growth of the said sector in the region. Among these, the committee is firmly of the opinion that banks should increase the credit-deposit ratio as it is hindering the growth of MSME in the Northeast. In the absence of loans from government recognised financial institutions, many Northeastern entrepreneurs are forced to take loans from private money lenders who charge very high interest rates. Borrowing at such rates financially cripple MSME units from the very outset. To end this high debt cycle, the standing committee has advised that nationalised banks improve credit flow to the MSME sector along with taking an entrepreneur-friendly approach. Furthermore, the committee has suggested that banks should not ask for collateral for loans not exceeding INR 10 lakh as per the Reserve Bank of India guidelines. If these steps are implemented well, the MSME sector in the Northeast will likely prosper, providing income and employment to lakhs of youths in the region.
It is important to note that factors such as difficult terrain, fragile ecology and distance from the mainland have always posed a great challenge to the economic development of the region. The region is not optimally conducive to the development of heavy industries and thus the focus should be on the MSME sector to strengthen the region economically. It’s a pity that even after so many decades of Independence, MSME sector in the region is yet to receive adequate attention from concerned authorities. Although a number of spirited youths are doing well in this sector, there is still much to be done to maximise the region’s potential. In this context, along with making bank loans easily available, efforts should be made to effectively market the products. Further improvements of road, rail and air connectivity between the mainland and the Northeast must be prioritised to help reduce transportation time and cost.
In follow up to the recommendations made by the parliamentary standing committee, governments and other major stakeholders of the region in unison should urge the Centre to aid in implementing the suggestions in true letter and spirit. Moreover, the state governments must also undertake necessary steps such as creation of MSME zones close to strategically located areas where products can be easily dispatched to markets all over the country. Both the Centre and the state governments must further champion skill development camps to train the Indian Youth and to understand the nuances of running MSME units. If such measures are undertaken, the MSME sector in the Northeast will definitely scale to greater heights.