MSME ministry strongly propagates SME Exchange

MSME ministry strongly propagates SME Exchange

The CII conference on SME Exchange witnessed its delegates from the ministry promoting for a dedicated SME exchange platform

Friday, July 17, 2009

NEW DELHI, INDIA: Confederation of Indian Industry, non-government, not-for-profit, industry led and industry managed organization today announced that, while addressing the conference on SME Exchange Dinesh Rai, Secretary, Ministry of Micro Small and Medium Enterprises, strongly promoted a dedicated, transparent and neutral SME exchange platform to provide cost effective solutions to SMEs by reducing the IPO and compliance cost and without undervaluing the companies.

Rai reiterated that MSMEs plays a huge catalytic role in the development process of our economy and funding the risk capital requirements of this sector through a vibrant SME Exchange model would help this sector which will eventually lead to higher governance standards in this industry, said a press release.

With a positive outlook he was quoted saying that SME platform in India has the potential to become one of the largest alternative platforms in the world.

Dr. K P Krishnan, Joint Secretary, Department of Economic Affairs, Ministry of Finance, emphasized on the public policy issues relating to risk capital raising of MSMEs and maintained that recognizing the fact that India does not have a fully functional market in this area, there was a need to instead develop and strengthen the existing markets for such activities.

Dr Krishnan also stressed on the need for strengthening the entire eco system before bringing the exchange activities to life. Legal, Venture Capital and Private Equity, including taxation aspects are important areas that would need to be looked at he said. Dr Krishnan also mentioned that the exit clauses also need thorough thinking through and put into place for a successful SME Exchange model to work, said the release.

Speaking at the Conference, Jignesh Shah, chairman CII Task Force on Indian Financial Markets and Chairman and group CEO said that financial technologies strongly supported the need of risk capital for the fund starved MSME sector and mooted the idea of having multiple exchanges rather than confining it to a few.

He stressed the need for competition in this sector. Stating that the Exchange setting up was both a challenge and opportunity.

“Out of the existing 11 millions SMEs in India at present, even if the conservative figure of 1 per cent qualify as per the designed standards it will lead to huge capital generation,” he added.

©CIOL Bureau