MSEs get a big push
Speaking exclusively with Millennium Post, Union Minister Giriraj Singh assures that the government is motivated to create a distress-free enterprise sector.
The sector of micro, small and medium enterprises is on the path of revival as the government has increased its budgetary allocation by 59 per cent for 2018-19. Union Minister of State (I/C) for Micro, Small and Medium Enterprises Giriraj Singh emphasises the government's motivation to make MSME a conducive and dynamic sector.
What are the new initiatives to propel employment generation in the MSME sector?
We have set a target to provide employment through khadi to over five crore people. The department has started a project to establish khadi clusters in 800 villages. As per the project, the government has decided to rope in khadi institutions with a turnover ranging from Rs 2 crore to Rs 50 crore for adopting villages. The Ministry has already provided Rs 75 lakh to khadi institutions for adopting 400 villages. Since our Prime Minister Narendra Modi has become the brand ambassador of khadi, its turnover has increased from Rs 811 crore to Rs 2,200 crore and the sale of village industries products has reached Rs 52,000 crore.
We are also bringing in the solar charkha mission under which 500 clusters would be established in almost every parliamentary constituency, which would create employment for five crore people. Presently, the solar charkha scheme is in operation in Surat (Gujarat), Nawada (Bihar), and Varanasi (Uttar Pradesh).
The government is paying special attention to make the Micro, Small and Medium Enterprises (MSME) sector more viable. The budgetary allocation for the sector is encouraging. What are your comments on the overall condition of the MSME sector in the country?
The MSME sector was in poor shape when the government led by Prime Minister Narendra Modi took charge in 2014. The continuous dedicated effort of the PM has resulted in the MSME sector in receiving a new lease of life. Given that the MSME sector is the second largest sector of employment after agriculture, the government has increased the budgetary allocation for the ministry by 59 per cent for the year 2018-19, which shows how serious we are about the holistic growth of the MSME sector.
We have also started preparing a data bank by creating the Udyog Aadhaar Memorandum to tabulate the actual data of the registered entrepreneurs in the sector. As per the NSSO data, there are six crore MSME entrepreneurs and 12 crore people are directly employed with the sector. Out of the six crore traders, there are over one crore female entrepreneurs.
The government has taken several key initiatives to make the MSME sector distress-free by bringing about changes in the law, pumping in funds, etc. We have also increased the collateral free loan amount under the Credit Guarantee Fund Trust for Micro and Small Enterprises from Rs 1 crore to Rs 2 crore and the risk cover percentage has been increased from 50 per cent to 75 per cent. The government has also increased the corpus fund from Rs 2,500 crore to Rs 7,500 crore and from 2018-19 onwards, it will be above Rs 8,000 crore to better the fund availability for MSMEs.
Tell us about steps taken to promote the ease of doing business in the MSME sector?
We have scrapped over 1,800 redundant legislations to ease the process of registration, business development, credit guarantee, etc. We have launched mobile apps to ensure that the registration process is hassle-free. Now, entrepreneurs would not have to run from pillar to post for the registration of their firms as they can do it through the mobile app by autonomously declaring their credentials. It's indeed a big move to create a stress-free environ for our entrepreneurs.
Delay in payment is a major obstacle to the growth of the MSME sector. What are your comments?
We have created the Samadhan portal for the timely redressal of grievances related to delay in payment. The traders would only have to register themselves with the portal and their payments would be directly transferred to their registered account within 45 days. Just in few months, after the portal was started in last October, payment disputes of Rs 131 crore have been settled mutually without any ministerial-level interventional.
A total number of 3,558 complaints amounting to Rs 862 crore were registered on the portal and out of that payment, disputes of Rs 131 crore have been resolved while the remaining complaints would also be sorted out gradually. Since the portal is being monitored by all the departments including the PMO, it is acting as a game-changer in the process of payment recovery.
What are your comments regarding changes in the definition of MSME?
It is a landmark decision as the definition has been changed to provide a much-needed fillip to the MSME sector. As per the new classification, a microenterprise will be defined as a unit with an annual turnover of less than or equal to Rs 5 crore; a small enterprise with an annual turnover of more than Rs 5 crore and less than Rs 75 crore and a medium enterprise with an annual turnover of more than Rs 75 crore and less than Rs 250 crore. Now, there will be no inspector raj as no inspector would probe the MSME entrepreneurs on the purchase of costly machines. The definition of MSME is based on the investments in plant and machinery and it would improve the ease of doing business by avoiding unnecessary inspections and enabling the authorities to verify claims of businesses using the sales data they have generated from the GST Network, the company that processes goods and services tax (GST) returns.
What steps have been taken to empower aspiring entrepreneurs from the Scheduled Caste and Scheduled Tribes?
We have taken several initiatives to promote aspiring entrepreneurs from the Scheduled Caste and Scheduled Tribes categories. We have launched an SC-ST Hub in 2016, which is an e-platform that serves as a support system exclusively for new age entrepreneurs from the SC & ST communities. The platform is providing assistance in marketing, vendor development, manufacturing and technology upgradation through various schemes. The hub works in partnership with the Dalit Indian Chamber of Commerce and Industry (DICCI) and National Small Industries Corporation (NSIC).
How is National Small Industries Corporation (NSIC) supporting small or medium entrepreneurs in exploring the market potential?
On the lines of big players, the NSIC also helps small traders by procuring raw material in bulk and distributing the same to small enterprises at an affordable rate. The NSIC is helping in completing tender documents of the entrepreneurs apart from providing manufacturing and marketing assistance.
The body of small entrepreneurs actively supports traders in payment recovery. Similarly, with the help of the Coir Board, which is providing employment to over seven lakh people, the government has started manufacturing Coir-based products in northern parts of the country by bringing in the raw materials from the South. It is the outcome of our dedicated efforts that the export of Coir Board has been doubled in about four years from Rs 11 crore to Rs 22 crore.
(Dhirendra Kumar is Special Correspondent with Millennium Post)