RBI has made some crucial recommendations for the MSME sector for stimulating it s actual potential. Examine the above in line with the recommendations made.

The MSME sector is the key growth engine of India as it contributes 28% to the GDP. Its contribution to the manufacturing sector alone is around 45 per cent. The sector gives employment to over 111 million people. The RBI Panel has made some vital recommendations to address the issues being faced by the sector.
� The Panel has suggested that the MSME Development Act 2006 must be changed to ensure market facilitation and ease of doing business as many young companies are forced to look abroad due to a better business environment, exit policies and better funding.
� The issue of credit flow to the sector has been deeply addressed and it has been suggested that SIDBI should be set up, which will help to create credit markets for MSMEs in various under-served regions and a point for SME debt.
� The panel has also recommended widespread use of technology for a host of problems which are encountered by the sector.
� It also suggests that the information on the Government e-Marketplace should be integrated with the Trade Receivables Discounting System. This is aimed at boosting the liquidity of the sector.

Topics: GS-III: Indian Economy Issues Relating to Planning