17 October 2017

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Is SME Exchange delayed?

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Launch of a dedicated stock exchange for small and medium enterprises (SMEs) may get delayed due to prevailing uncertainty in bourses, a senior government official said.

"I think they (the Bombay Stock Exchange and the National Stock Exchange) are looking at a good time to launch because the stock market had not been doing so well," Secretary in the Ministry of Micro, Small and Medium Enterprises (MSME) R K Mathur said.

He said that most of the regulatory hurdles to set up exchanges have been resolved. "Our (Ministry) side, there are no issues to be sorted out," Mathur added.

Market regulator SEBI in September last year had given its clearance to dedicated stock exchanges which aim to open access for equity finance to SMEs.

Millions of SMEs have always been complaining of difficulty in accessing both debt and equity capital. While the government has taken several measures to ease access to credit, giving them easier access to equity is the next step in that process.

Operationalisation of SME exchanges is one of the focused areas of the Ministry during the next Five Year Plan.

"Introduce personal income tax rebate for investment in equity of MSMEs to be listed on the proposed SME Exchange," the Ministry has recommended the Planning Commission for 2012-17 period.

Apart from fiscal incentives, the Ministry has asked for aggressive market intervention, such as promoting companies for market making.

Last year, the market conditions were tight. The stock market has shown an uptrend during the new year but uncertainties continue.

 

 

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