Kalraj Mishra, the Union Minister for MSMEs, interacted with MSME Associations from across the country here today. This was for the first time the Minister discussed important issues of general, regional and sectoral importance with a pan India gathering after the new Government was formed. He lauded the Industry Associations and the business and manufacturers organisations for playing an active role in conceptualising, developing and implementing the Government support packages for the industry and requested them to continue to come with innovative solutions to address various issues facing the sector and provide constructive inputs for policy formulation and implementation.
The Minister said that India is the pioneer in enacting specific legislation for the MSME Sector in the form of MSMED Act 2006 which has addressed issues which have been haunting the sector for long, like that of public procurement and delayed payments. He highlighted a number of programmes and schemes in the areas of finance, infrastructure, technology, marketing and skill development being implemented by the Ministry. He informed that the Ministry is trying to formalize the relationship with prominent MSME Associations to be its partner in the growth process through a procedure of registration. MSME Associations raised various issues like fluctuation in raw material prices, need for procurement Policy at the State level, uniform tax structure, insistence of banks for collaterals the problem of delayed payments, inflation, skill development, lack of awareness about the cluster development initiatives, setting up of a Vendor development cell, unwillingness of CPSUs to take supply from new MSMEs, tax incentives for MSME sector, simple registration of MSME Units, Land cost and availability, rehabilitation of sick enterprises and need for exit policies.
The Minister assured the Industry Associations that their concerns will be addressed in near future at the right forum. He further said that in the next five years, the MSME sector will create ample opportunities and that MSMEs can help India in its path to become a developed state. Present on this occasion were Secretary MSME Shri Madhav Lal and ASNDC Shri Amarendra Sinha and Senior Officials from Ministry, KVIC, NSIC, SIDBI including major MSME Associations across the country and across sector. Full text of the speech made by the Minister on the occasion is as follows:-
“The MSME sector in India is perse in terms of its size, levels of technology employed and range of products and services produced. Starting from grass root village Industries, the products from the sector spans to auto components, micro-processors, electronic components and electro-medical devices. MSMEs have shown constant growth rate of over 10% in recent years much ahead of the large-scale corporate sector. This sector contributes 8 per cent of the country’s GDP, 45 per cent of the manufactured output and 40 per cent of its exports. The MSMEs provide employment to over 80 million persons through over 36 million enterprises producing over six thousand products.
India is one amongst very few countries which has an overarching legal framework for the MSME Sector in the form of MSMED Act 2006 which has established provisions under which issues like public procurement and delayed payments are addressed. In exercise of the powers conferred under section 11 of the Micro, Small and Medium Enterprises Development (MSMED) Act, 2006, the Government of India has notified Public Procurement Policy for Micro & Small Enterprises (MSEs) order, 2012 which is applicable for Every Central Ministry / Department / PSU w.e.f. 1st April, 2012. The Policy mandates that every Central Ministry / Department / Public Sector Undertaking shall set an Annual goal of procurement from Micro and Small Enterprises from the financial year 2012-13 and onwards, with the objective of achieving an overall procurement of minimum of 20 percent of total annual purchases of products produced and services rendered by Micro and Small Enterprises in a period of three years. Policy has also earmarked a sub- target of 4% out of the 20%, from MSEs owned by SC/ ST Enterprises.
In order to address the issue of delayed payments, Micro & Small Enterprises Facilitation Councils (MSEFCs) have been constituted in most of the States and Union Territories to enable quick adjudication and disposal of delayed payment related cases. I have been informed that the erstwhile system of registration of SSI has been done away with and a new and transparent system of filing of Entrepreneurship Memorandum by the MSMEs has been introduced under the MSMED Act, 2006. Further, the Ministry of MSME is in the process of installing a universal IT enabled on-line system of EM filing in collaboration with State Governments.Ministry of MSME has been implementing a number of programs and schemes in the areas of finance, infrastructure, technology, marketing and skill development to address the problems confronting the sector.
Ministry is conducting Skill Development Programmes for the entire value chain of manufacturing, starting from village industries to state of the art manufacturing, in sectors like engineering, auto component etc. The 18 Tool Rooms and technology development centres under the Ministry are providing both long and short term training to more than 1 lakh youth at present, in tool making, computer aided manufacturing and other advanced technologies, to cater the needs of the important sectors like auto components, electronics, pharma etc. My Ministry is also the one among the pioneers to organise entrepreneurship programmes to inculcate entrepreneurial qualities in the Indian Youth. On an average, Ministry is adding 6 lakh skilled manpower to the work force every year.
Availability of adequate Credit is always a major issue for growth and sustenance of the MSME Sector. In this regard my Ministry has taken significant initiatives including Credit Guarantee Fund Scheme for Micro and Small enterprises, Micro Finance Programme and Portfolio Risk Fund etc. The objective of Credit Guarantee Fund Scheme is that of making available credit to Micro and Small Enterprises for loans up to Rs. 100 lakh without collateral/ third party guarantees. The Ministry is also implementing Credit Linked Capital Subsidy Scheme (CLCSS) for Technology Upgradation with the aim to facilitating Technology Upgradation of Micro and Small Enterprises by providing 15% capital subsidy on institutional finance availed by them for induction of well-established and improved technology in approved sub-sectors/products. Since inception of the scheme, 28832 units have availed subsidy of Rs.1655.27 crore till 30.06.2014.
We are supporting the MSEs in upscaling their quality standards and productivity under the 10 Schemes of National Manufacturing Competitiveness Programme (NMCP). The components of NMCP focus to enabling MSMEs in technology based tools in the areas of marketing, productivity, quality upgradation etc. Clustering is a global phenomenon for the sustenance of MSME Sector. The Ministry of MSME is supporting modernisation, and innovation in MSME Clusters. The Ministry of MSME is supporting modernisation, and innovation in MSME Clusters. The Ministry is also developing infrastructure for the MSME Clusters under the IID Component of Cluster Development Programme. Under the Scheme existing industrial estates are also being supported for upgradation and modernization.
In industrialised countries the Industry Associations and the business and manufacturers organisations play an active role in conceptualising, developing and implementing the Government support packages for the industry and business. Industry Associations and Chambers of Commerce in India need also to play a proactive role in Government initiatives for up gradation and up skilling of our MSME sector. They should come forward with innovative solutions to address various issues facing the sector and provide constructive inputs for policy formulation and implementation. The MSME Associations, in particular, should play a major role in advocacy of Government schemes and programmes to reach the benefits to the existing and prospective entrepreneurs needing handholding support.
In fact my Ministry is trying to formalize the relationship with prominent MSME Associations to be its partner in the growth process.A procedure of registration of suitable Associations akin to EM filing is being conceptualized. Once this plan gets fructified MSME Associations will get to play bigger role in various aspects of policy making”.