Chief Economic Adviser calls for review of MSME loan overdue norms

Chief Economic Adviser V. Anantha Nageswaran has advocated for a review of loan overdue regulations applicable to micro, small and medium enterprises (MSMEs). He argued that current norms based on rigid, uniform global standards do not adequately account for the distinct cash-flow patterns of Indian MSMEs.

Nageswaran's statement reflects growing concerns about the mismatch between standardised lending rules and the operational realities of smaller businesses. He suggested that loan classification and overdue rules should be calibrated to reflect the actual working capital cycles and revenue patterns typical of MSMEs across different sectors.

The CEA's intervention comes amid ongoing discussions around regulatory frameworks that affect credit availability and borrowing costs for India's MSME sector, a key driver of employment and economic growth.