In an endeavour to address the financial requirements of energy-efficient projects of the MSME sector, the Finance Ministry has signed an agreement with the World Bank and the Small Industries Development Bank of India (SIDBI) recently.

Speaking to a Bizxchange correspondent, Ram Nath, chief general manager of the eastern zonal office of SIDBI, said, “At SIDBI we always endeavour to channelise the money which comes to us from the Finance Ministry or the World Bank for helping in the development of the MSME sector. This recent agreement is likely to give a huge boost to manufacturing-based MSMEs which often struggle to meet their production-related expenses.”

Notably, besides increasing energy efficiency investments in the MSME sector, the project will seek to raise the capacity, awareness, knowledge management and sharing in the sector by 2014-end.

In this context, V Raghunathan, owner of VR Engineering, a small-sized unit in Coimbatore which manufactures and supplies industrial pumpsets, said, “In many parts of the country, the government offers power subsidies to manufacturing-based MSMEs for helping them reduce their expenditure on power. If the government can extend similar subsidies to all other Indian states, it would help small players like us immensely.”

Meanwhile, Cognizant Technologies has informed that the MSME sector contributes around 50-75% to India’s GDP and accounts for 60-70% of employment generation in the country.