4.5 lakh MSMEs in UP took advantage of ECLGS during Covid: State MSME min Sidharth Nath Singh

With nearly 90 lakh MSMEs, UP had the largest number of estimated small businesses with a 14.20 per cent share of 6.33 crore MSMEs in the country (Image: FE online)

Credit and Finance for MSMEs: Around 4.5 lakh micro, small and medium enterprise (MSME) units in India’s most populous state of Uttar Pradesh have raised credit so far through the central government’s Emergency Credit Line Guarantee Scheme (ECLGS) launched last year post Covid, said state’s MSME Minister Sidharth Nath Singh on Thursday. Speaking on Day 1 of Financial Express Online’s inaugural SME Artha event, Singh said “Approximately 4.5 lakh units in UP took advantage of emergency credit guarantee scheme and were able to revive their units. It helped them recover from the working capital or credit squeeze they had.”

With nearly 90 lakh MSMEs, UP had the largest number of estimated small businesses with a 14.20 per cent share of 6.33 crore MSMEs in the country, as per the MSME Ministry 2020-21 annual report. Including UP, a significant part of the country’s MSME landscape was severely impacted due to Covid and following lockdown restrictions last year that led to challenges in production, labour movement, supply chain disruption, and more.

“During Covid last year and this year, we had decided not to shut our industrial units. We arranged for (movement) of their workers with mobility passes. We also ensured that they have the raw material supply by making sure vehicles carrying raw materials pass unhindered…We also waived fixed electricity charges,” added Singh who is also the minister for Investment & Export, NRI, Textile, Handloom & Sericulture, Khadi & Gramodyog, and Vice Chairman, Invest U.P.

The state was ranked second in the Ease of Doing Business annual rankings released in September last year. Moreover, UP secured sixth position in Logistics Ease Across Different States (LEADS) ranking this year from 13th rank in 2019. The ranking launched by the Commerce Ministry back in 2018 measures the ease in logistics activities in states. The tally was topped by Gujarat, Haryana, and Punjab.

“We realised that it is not going to easy for MSMEs to perform due to covid. Hence, we announced a reform policy particularly in the labour sector wherein we removed all labour laws except two which are (related to) minimum wages and the number of hours. Many other states followed what UP did. During Covid period, we also came up with a major reform in the MSME sector. For registering an MSME unit in the state, one can get a deemed No Objection Certificate (NOC) in 72 hours by online application and within three years the MSMEs will have to obtain all the NOCs and submit to the authorities,” said Singh.

The minister also highlighted that a GST cell was created to help MSMEs struggling with GST filing and the MSME Sathi app was launched to address different other issues faced by MSMEs. Similarly, “for the accounting purposes and particularly in the GST area, we brought in an iCloud-based software, trained initially about 20,000 MSMEs and provided the software to them free of cost. We have been able to add almost 80 lakh more MSMEs in the last 4.5 years,” he said. According to Singh, 80 per cent MSMEs in UP contribute towards the state’s exports. UP wants to enhance its export value from Rs 1.21 lakh crore annually to Rs 3 lakh crore by FY27.