New Delhi: Resenting that the small-scale sector was stifled by 'inspector raj' despite over a decade of liberalisation, Prime Minister Atal Behari Vajpayee said rules and regulations should be simplified for speedily liberating the sector.

"This should be done by making necessary changes in the legal and administrative framework. Wherever necessary, rules, regulations, procedures and guidelines should be amended and simplified after taking small and medium enterprises into confidence," Vajpayee said while addressing a global summit for small and medium enterprises (SMEs) on December 20.

Termining the nomenclature of 'small and medium' for the sector as a "misnomer" despite its "big" contribution to the economy, Vajpayee also virtually made out a case for lower bank lending rate for the enterprises.

He regretted that national financial institutions were not sufficiently responsive to the needs of the sector and said that it was ironical that it was getting credit at 13 per cent or more against 10 per cent or less for big companies and individuals for housing loans.

Even as he acknowledged the risk element in lending for the sector, Vajpayee said, "Yet, the challenge before all of us is how to reduce that risk, and how to increase stability, sustainability and the success rate of the sector."

At the same time, he said India was no exception to the sickness in the sector, where half the SME start ups worldwide did not survive five years and added that there was a need for serious global thinking on how to ensure greater stability of SMEs.

PTI