Indian MSMEs are carrying very heavy interest burden ranging from 14-17 per cent. While they are finding the sailing rough against global competition in international and domestic markets, the continuance of peak rate of interest rates has dampened demand further.

“The RBI has given the signal for change in policy which underlines need to revive growth as well as of its constraints that it cannot do it alone. It’s time the government also came forward and took policy measures to reduce transaction costs in economy and take steps for demand stimulation,” said V.K. Agarwal, president of Federation of Indian Micro and Small & Medium Enterprises (FISME). “The impact of reforms is same as of Tax cuts.”

The RBI also recently pitched for expediting economic reforms, including reduction of subsidy and implementation of DTC (Direct Taxes Code) and GST (Goods and Services Tax) to contain the fiscal deficit which is expected to exceed the Budget estimate.

Expressing its concern on dilly-dallying on GST, the FISME warned that postponing of GST further will prove disastrous. It called for decisive steps from the central government in addressing concerns of states.