The more than 300 micro, small and medium enterprises operating in industrial areas of Dhanbad and Bokaro welcomed Union finance minister Nirmala Sitharaman’s announcement of measures of support to the sector, with caveats.

They welcomed the facility of collateral-free automatic loan for the MSME sector but said that they were expecting much bolder decisions.

They said they were expecting simplification of the existing licence regime and added that a plan to shift MSMEs from congested areas to villages would have helped solve the problem of migration of people from rural areas.

“The announcement made by the finance minister will provide a new breath of life to the MSME sector, which is facing difficulties, and gradually a herald of new era of development in which the MSME sector of the country will compete at a global level,” said Rajeev Sharma, general secretary of Jharkhand Industries and Trade Association.

Sharma, who owns a small electrical equipment manufacturing unit at the Kandra Industrial area of Govindpur in Dhanbad, added: “We, however, were expecting some measures to simplify the multiple-licences regime for the industries i which industries need multiple licences from the state and central governments to operate.”

The proof of the pudding was yet to come, he felt.

“How the ground implementation of measures, particularly with respect to banks, is carried out will be important as our experience was not good with the Mudra loans. Banks used provide loans to such people from whom there were no chances of repayment while those deserving were denied loans,” he alleged. He stressed that a mechanism to supervise the disbursement of collateral-free automatic loans will have to be devised.

Bokaro-based rubber-roll manufacturing unit owner Mahesh Kejriwal, who is also president of the industries and trade association, rued a missed opportunity.

“Though a cumulative package of around Rs 6 lakh crore has been announced by the finance minister for the MSME sector and will help the MSME industries to some extent, we were expecting some measures on the line of China to shift industries from the congested areas to the villages which could have helped to solve the problem of both overcrowding and migration,” Kejriwal said. “When industries will develop in the hinterlands they will provide employment to villagers who will not have to go to the cities to find jobs.”

The revised definition of the MSME sector, whereby the classification of industries on the basis of their investment and annual turnover will change, will primarily help industries that plan to expand, Kejriwal said.