RBI Constitutes Expert Committee on Micro, Small & Medium Enterprises (MSMEs)


In the recent past, MSMEs or Micro, Small & Medium Enterprises have encountered several hurdles at and post the advent of GST implementation and demonetization. The MSME is one of the important segments of the economy contributing to production, employment generation and exports. The production of the MSMEs forms a significant portion of the GDP composition. That being the reason, the RBI board has emphasized the need of studying the present state of MSMEs and the problems encountered by them. The government is also concerned with the issues pertaining to the MSMEs and would like to extend necessary assistance.

In view of the feedback received from the industry in this regards, the Reserve Bank of India in its bi-monthly monetary policy statement dated 5th December 2018 declared that the RBI would be forming a committee to study the structural bottlenecks of  MSMEs and the factors affecting the performance of the MSMEs.

Accordingly, on 2nd January 2019, RBI has formed the committee under the Chairmanship of Shri U.K. Sinha, former chairman, Securities and Exchange Board of India. The terms of reference of the committee are –

  1. To review the current institutional framework that is in place in order to support the MSME sector
  2. To study the impact of the recent economic reforms on the sector and identify the structural problems affecting its growth
  3. To examine the factors affecting the timely and adequate availability of finance to the sector
  4. To study the global best practices with respect to MSMEs and recommend its adoption in India, wherever appropriate
  5. To review the existing MSME-focused policies and their impact on the sector
  6. To propose measures for leveraging technology in accelerating the growth of the sector
  7. To suggest long-term solutions for the economic and financial sustainability of the MSME sector

The committee is expected to study the issues of the MSME sector and submit its report by the end of June 2019. Once the committee undertakes the comprehensive review of the MSME sector it would identify the problems faced by them and would also suggest long term solutions to overcome the obstacles. Based on the solutions proposed by the committee Reserve Bank of India and Government of India will come up with relief measures to assist the MSME units.

Article Contributor:

Mr. Ashok Magdum

Mentor, deAsra

Mr. Magdum has 37 years of experience in banking, law, finance and psychology. He was a member of the board of administration at Maharashtra State Co-operative bank, Mumbai during 2015-17.

deAsra Mentor