Now an index for the MSMEs
CRISIL and SIDBI come together to launch CriSidEx, a sentiment index for MSMEs Small and medium sector industry lender Small Industries Development Bank of India (SIDBI) and rating agency CRISIL have entered into a Memorandum of Understanding (MoU) to launch CriSidEx, India’s first Sentiment Index for Micro, Small and Medium Enterprises (MSME). This new index will indicate the current state and expected outlook on the vast and fast growing MSME sector of the country every quarter. The MoU was signed by Ms Ashu Suyash, Managing Director and Chief Executive Officer, CRISIL Ltd., and Mohammad Mustafa, Chairman and Managing Director, SIDBI in Mumbai on Monday. The main objective of this Sentiment Index is to provide crucial insights into employment, business environment and foreign trade, both the organizations said. Read On ..
Since data on MSMEs comes with a significant time lag, there is no way to regularly aggregate and assess the ground situation among the wide range of disparate enterprises spread across the breadth and length of India.
“Effective policy making is a function of the quality of information at hand and given the government’s agenda of ensuring inclusive growth, a leading indicator that reflects the business predicament and tidings of the MSME sector is crucial,” said Ms. Ashu Suyash at the MoU signing ceremony.
“CriSidEx is designed to do exactly that because it will gather real-time, ground-level information directly from the MSMEs,” she added.
Every quarter, the CriSidEx survey will cover over 1,000 MSMEs using a structured questionnaire to ensure consistency in methodology and capture information sans significant deviations. The sample will have representation based on size, geography and nature of business and across different legal entities.
Apart from the government and MSMEs themselves, the survey and CriSidEx will provide intelligence and insights for regulators, trade bodies, lenders as well as economic & financial analysts.
Since most SMEs are unlisted they do not report financial results every quarter as has been mandated for listed companies, their financial state remains unclear.
CriSidEx will help in forecasting the business environment because it will capture sentiment on various business parameters such as the business situation, capacity utilisation, order book and margins. It will flag potential headwinds and changes in production cycles and thus help improving market efficiencies, CRISIL and SIDBI said in a joint statement.
SIDBI chairman Mr Mustafa said “CriSidEx will allow stakeholders, especially policy makers, to take timely, even proactive – steps, including those based on early warnings thrown up by the survey. Given the significance of the MSME sector to India’s economy, the survey and CriSidEX will help in various policy inputs in future.”
The survey by capturing the sentiment of exporters and importers will provide actionable feedback on foreign trade, too. The CriSidEx survey will also cover lenders, including scheduled commercial banks, non-banking finance companies and co-operative banks.
The results of the survey and CriSidEx levels will be published soon after every quarter. The first of the findings will be published in January 2018.
Over a period of time CriSidEx will become the benchmark for assessing activity levels and progress in the MSME sector.
The Modi Government has accorded high priority to the SME sector as it would create more jobs than big manufacturing units which are adopting automation.
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