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Uttar Pradesh industry has welcomed the setting up of the Micro Units Development Refinance Agency (MUDRA) or MUDRA Bank, which was announced by Prime Minister in New Delhi yesterday.
UP has over three million Micro, Small and Medium Enterprises (MSME) with the majority functioning as micro units, spanning both services and manufacturing sectors.
The lack of proper financing framework for the unregistered and micro units often impedes their growth. It has been well established that the equitable growth of MSMEs is imperative for a more robust economic growth, distribution of wealth and creational of jobs.
MUDRA Bank aims at providing credit of up to Rs 10 lakh to small entrepreneurs. It would have an initial corpus of Rs 20,000 crore and a credit guarantee corpus of Rs 3,000 crore.
Kanpur-based Merchants' Chamber of UP (MCUP) secretary A K Sinha welcomed the initiative MUDRA Bank terming it "a product of farsightedness" of the incumbent Modi government.
"The need of such banking facilities was being felt by the micro, small and cottage industries. The startups find it difficult to raise funds from existing banks," he noted.
Sinha observed the initiative would empower youth to become job providers rather that job seekers.
Indian Industries Association (IIA) executive director D S Verma noted the provision of loan of up to Rs 10 lakh to small units would help them realise their growth potential in UP.
MSMEs contribute 60% to UP's industrial output and provide employment to five million people. The state accounts for about 12% of the country's MSME space.
As per the 4th All-India Census of the sector conducted by the union MSME ministry, over 62% of the MSME units in UP were being run by entrepreneurs belonging to the Scheduled Caste (SC), Scheduled Tribe (ST) and Other Backward Classes (OBC) categories.
UP had over 3.1 million MSMEs, including 7,60,000 and 2.34 million units in the manufacturing and services sector. The units run by those belonging to the three categories totalled about two million. The remaining units were run by 'others' and 'societies' as per the survey.
Rural enterprises accounted for over half of the MSME units in UP, which highlighted significance of the sector in ensuring equitable distribution of employment opportunities, resources and wealth.
Proprietorship accounted for 95% of the ownership pattern, while partnership, private company, public limited company and cooperatives account for less than one% each.
The key MSME enclaves in UP include Varanasi, Allahabad, Moradabad, Saharanpur, Lucknow, Kanpur, Agra, Ferozabad, Meerut, Bhadohi, Ghaziabad, Noida, Bareilly, Gorakhpur, Khurja, Aligarh and Mathura.
These are product specific hubs, for example Varanasi is famous for banarsi sari, Agra and Kanpur for leather, Bhadohi for carpets, Moradabad for brassware, Lucknow for chikan and Aligarh for locks.
