The index will indicate the current state and expected outlook on the MSME sector every quarter
SIDBI and CRISIL today signed a memorandum of understanding (MoU) to launch CriSidEx, a sentiment index for micro, small and medium enterprises (MSME).
The sentiment index is expected to provide insights in to employment, business environment and foreign trade.
The index will indicate the current state and expected outlook on the MSME sector every quarter.
Currently, data on MSMEs comes with a significant lag, so there is no way to regularly aggregate and assess the ground situation amongst a wide range of disparate enterprises spread across India.
CRISIL Managing Director and Chief Executive Officer Ashu Suyash said, "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."
"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.
The CriSidEx will also 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.
According Mohammad Mustafa, Chairman and Managing Director SIDBI "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 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 every quarter. The first of these 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.