‘MSMEs give rise to inclusive economic growth’
19 Aug 2013 2:41 AM IST
MSME sector contributes eight per cent to the country’s GDP, 45 per cent of the manufactured output and 36 per cent of its exports but if we see the support base provided by the government, it is indeed very minimal. Even several state governments do not have separate ministry for MSMEs.
You already said that MSME sector contributes eight per cent to the country’s GDP, 45 per cent to manufacturing output and 43 per cent of its exports. The micro, small and medium enterprises (MSME) sector is indeed a vibrant sector which nurtures entrepreneurial talent besides meeting other social objectives including that of providing employment to millions of people across the country. In fact, the sector contributes significantly to inclusive growth of the economy through mobilisation of capital and entrepreneurial skills. If provided sufficient funds and support, this sector has enormous potential for further growth and generation of employment. Nevertheless, support from Central Government cannot be considered minimal. As you know, the allocation of funds in the eleventh plan for this sector was approximately 11,000 crore. In the twelfth plan, the allocation is Rs 24,124 crore which is more than eleventh plan allocation.
MSME sector provides employment to more than 6 crore people, but if we see your budget approval, you are going to invest only Rs. 2,835 crore on the plan schemes this year.
The budget allocation for MSMEs ministry is Rs 2,977 crore in this year i.e. 2013-14. Whereas Rs 2,835 crore was earmarked in the last financial year (2012-13). With increase in allocation we expect further increase in employment this year. In fact the role of our ministry is to facilitate growth of MSME and employment through various schemes. Our thrust is to provide entrepreneurship, skill development and provide financial assistance incentives for proper growth. This way, we expect to enhance employment potential of this sector.
In order to make micro, small and medium enterprise (MSME) sector more productive and globally competitive, your ministry is launching a project, Badal, a cloud computing platform for MSMEs, can you please explain in detail about this project.
The MSME Ministry is proposing to modify the scheme for promotion of information and communication technology (ICT) in MSME sector [under National Manufacturing Competitiveness Programme (NMCP)]. The proposed modification emphasises use of cloud computing (project Badal) by MSMEs. User charges paid by MSMEs for availing cloud computing will be subsidised on tapering basis, for a period of 3 years. It is believed that MSMEs will continue to use the ICT applications with their own expenses after 3 years. In the pilot phase, the cloud computing facilities will be made available to approximately 1,800 MSMEs and approximately 500 students (prospective entrepreneurs) of engineering colleges and technical institutions. Total budget of the scheme is proposed to be around Rs 83 crore with government contribution of around Rs 66 crore.
One recently published report says that only 51 per cent of online SMBs use the web to advertise and a mere 27 per cent use it for e-commerce. Do you think project ‘Badal’ will help in increasing e-commerce for MSMEs?
It is been observed that the resource-scarce MSMEs are not in a position to equip themselves with advanced ICT infrastructure or software or expertise. Meanwhile, the concept of cloud computing has emerged significantly to address these issues of MSMEs. Cloud computing is emerging as a cost effective and viable alternative in comparison to in-house IT infrastructure installed by MSMEs. In cloud computing, MSMEs use the internet to access common as well as tailor-made IT infrastructure including software for managing their business processes.
This project will make Indian MSMEs more competitive in the internet world. It has been observed that cloud computing may provide the requisite ICT solutions to MSMEs like e-commerce, e-marketing, sourcing for value chain, managing supply chain, etc.
Global multi-brand retailers must have to comply with the mandatory 30 per cent sourcing norm from small industries. What steps you are taking to make it sure that multi-brand retailers must comply with the norms?
Ministry of MSME is in the process of capacity building of the MSMEs so that they are able to meet the requirement of mandatory 30 per cent procurement by multi-brand retailers. These inter alia include, enabling manufacturing sector to be competitive through quality management standard & quality tech. tools (QMS/QTT), credit linked capital subsidy scheme, Design Clinic Scheme for design expertise to manufacturing sector (DESIGN), marketing support/assistance to MSMEs (bar code), national campaign for investment in intellectual property rights (IPR), etc.
Do you think if government promotes small-scale industry, this will help protecting environment?
Office of the Development Commissioner (MSME), ministry of micro, small & medium enterprises is actively engaged in energy efficiency efforts in MSME segment. Accordingly, a scheme 'technology and quality up gradation support to micro small and medium enterprises' (a component of NMCP) has been formulated to address the issues related to energy efficiency and to encourage industries in MSME sector to adopt energy conservation measures and reduce emission of greenhouse gases. Under the scheme, our ministry is supporting MSME to acquire energy efficient technologies by providing 25 per cent capital subsidy incurred in implementation of the technology upto maximum Rs 10 lakh.
To enhance the outreach, this office has also launched a ‘clean technology innovation’ programme for $4 million in partnership with United Nations Industrial Development Organization (UNIDO), Global Environmental Facility (GEF) and Federation of Indian Chamber of Commerce and Industry (FICCI) as implementing partner in execution in May, 2013. The main objective of the project is to promote clean energy technology innovations and entrepreneurship in selected SMEs in India through Cleantech innovation platform and entrepreneurship acceleration programme. The Project components are:
a) National Platform to promote clean technology innovations and competitiveness of SMEs and business models that can deliver global environmental benefits.
b) Building national policy for clean technologies and the development of a supportive local entrepreneurial ecosystem.
c) Policy and institutional framework for scaling up cleantech competition, innovations and acceleration activities across India.
You already said that MSME sector contributes eight per cent to the country’s GDP, 45 per cent to manufacturing output and 43 per cent of its exports. The micro, small and medium enterprises (MSME) sector is indeed a vibrant sector which nurtures entrepreneurial talent besides meeting other social objectives including that of providing employment to millions of people across the country. In fact, the sector contributes significantly to inclusive growth of the economy through mobilisation of capital and entrepreneurial skills. If provided sufficient funds and support, this sector has enormous potential for further growth and generation of employment. Nevertheless, support from Central Government cannot be considered minimal. As you know, the allocation of funds in the eleventh plan for this sector was approximately 11,000 crore. In the twelfth plan, the allocation is Rs 24,124 crore which is more than eleventh plan allocation.
MSME sector provides employment to more than 6 crore people, but if we see your budget approval, you are going to invest only Rs. 2,835 crore on the plan schemes this year.
The budget allocation for MSMEs ministry is Rs 2,977 crore in this year i.e. 2013-14. Whereas Rs 2,835 crore was earmarked in the last financial year (2012-13). With increase in allocation we expect further increase in employment this year. In fact the role of our ministry is to facilitate growth of MSME and employment through various schemes. Our thrust is to provide entrepreneurship, skill development and provide financial assistance incentives for proper growth. This way, we expect to enhance employment potential of this sector.
In order to make micro, small and medium enterprise (MSME) sector more productive and globally competitive, your ministry is launching a project, Badal, a cloud computing platform for MSMEs, can you please explain in detail about this project.
The MSME Ministry is proposing to modify the scheme for promotion of information and communication technology (ICT) in MSME sector [under National Manufacturing Competitiveness Programme (NMCP)]. The proposed modification emphasises use of cloud computing (project Badal) by MSMEs. User charges paid by MSMEs for availing cloud computing will be subsidised on tapering basis, for a period of 3 years. It is believed that MSMEs will continue to use the ICT applications with their own expenses after 3 years. In the pilot phase, the cloud computing facilities will be made available to approximately 1,800 MSMEs and approximately 500 students (prospective entrepreneurs) of engineering colleges and technical institutions. Total budget of the scheme is proposed to be around Rs 83 crore with government contribution of around Rs 66 crore.
One recently published report says that only 51 per cent of online SMBs use the web to advertise and a mere 27 per cent use it for e-commerce. Do you think project ‘Badal’ will help in increasing e-commerce for MSMEs?
It is been observed that the resource-scarce MSMEs are not in a position to equip themselves with advanced ICT infrastructure or software or expertise. Meanwhile, the concept of cloud computing has emerged significantly to address these issues of MSMEs. Cloud computing is emerging as a cost effective and viable alternative in comparison to in-house IT infrastructure installed by MSMEs. In cloud computing, MSMEs use the internet to access common as well as tailor-made IT infrastructure including software for managing their business processes.
This project will make Indian MSMEs more competitive in the internet world. It has been observed that cloud computing may provide the requisite ICT solutions to MSMEs like e-commerce, e-marketing, sourcing for value chain, managing supply chain, etc.
Global multi-brand retailers must have to comply with the mandatory 30 per cent sourcing norm from small industries. What steps you are taking to make it sure that multi-brand retailers must comply with the norms?
Ministry of MSME is in the process of capacity building of the MSMEs so that they are able to meet the requirement of mandatory 30 per cent procurement by multi-brand retailers. These inter alia include, enabling manufacturing sector to be competitive through quality management standard & quality tech. tools (QMS/QTT), credit linked capital subsidy scheme, Design Clinic Scheme for design expertise to manufacturing sector (DESIGN), marketing support/assistance to MSMEs (bar code), national campaign for investment in intellectual property rights (IPR), etc.
Do you think if government promotes small-scale industry, this will help protecting environment?
Office of the Development Commissioner (MSME), ministry of micro, small & medium enterprises is actively engaged in energy efficiency efforts in MSME segment. Accordingly, a scheme 'technology and quality up gradation support to micro small and medium enterprises' (a component of NMCP) has been formulated to address the issues related to energy efficiency and to encourage industries in MSME sector to adopt energy conservation measures and reduce emission of greenhouse gases. Under the scheme, our ministry is supporting MSME to acquire energy efficient technologies by providing 25 per cent capital subsidy incurred in implementation of the technology upto maximum Rs 10 lakh.
To enhance the outreach, this office has also launched a ‘clean technology innovation’ programme for $4 million in partnership with United Nations Industrial Development Organization (UNIDO), Global Environmental Facility (GEF) and Federation of Indian Chamber of Commerce and Industry (FICCI) as implementing partner in execution in May, 2013. The main objective of the project is to promote clean energy technology innovations and entrepreneurship in selected SMEs in India through Cleantech innovation platform and entrepreneurship acceleration programme. The Project components are:
a) National Platform to promote clean technology innovations and competitiveness of SMEs and business models that can deliver global environmental benefits.
b) Building national policy for clean technologies and the development of a supportive local entrepreneurial ecosystem.
c) Policy and institutional framework for scaling up cleantech competition, innovations and acceleration activities across India.
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