Speech for Minister of MSME on occasion of meeting of National Board for MSME to be held on 10 th July 2015

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1 Speech for Minister of MSME on occasion of meeting of National Board for MSME to be held on 10 th July 2015 The Prime Minister of India has envisioned making country as a Manufacturing Hub. He has visualise a three pronged strategy for marching towards this goal and making country as an international destination for world beating product manufacturing by (i) Make-in- India, (ii) Zero Defect Zero Effect and (iii) Skilling India programs. The vision of making country a manufacturing hub and helping in achieving double digit GDP growth rate is only possible by giving impetus to MSME sector of the country which is called engine of growth. It is a well known fact that the MSME sector as a whole contributes significantly 37.5% in country s GDP; it also contributes 45% of the total manufacturing and approximately 40% of the total export of the country. The MSME sector is also the largest employer after the agriculture sector. Keeping in view the limited natural resources available in the country, the MSME sector is not only going to give significant share in country s economic growth but also in absorbing unemployed youth though entrepreneurship and employment creation. 1

2 The major challenges before the MSME are lack of credit, technology up-gradation, infrastructural support, market and export support and to compete with the large and multinational industries both in domestic and international markets. To support MSMEs and create an eco-system of world class manufacturing, the country has initiated Make-in-India policy. The Ministry is aligning its plans and programmes to give support to the manufacturing MSMEs. Some of the initiatives taken by the Ministry of MSME on Make in India are: o Portal for on-line MSME registration /EM filing; o Technology Centre System Programme(TCSP)-Strengthening of 18 existing Technology Centres and establishment of 15 new Technology Centres across the country focussing on different industrial sectors with the assistance of World Bank; o Up-scaling of Lean Manufacturing Competitiveness Scheme (LMCS) and implementing it in 500 mini clusters to enhance productivity and waste minimization; o Evolving ZED certification system along with QCI (DIPP) and alignment of NMCP Schemes with it for assisting MSMEs to adopt quality certification; 2

3 o Ongoing UNIDO-MSME-GEF Cleantech Program for innovation in energy efficiency in MSMEs and a new UNIDO-MSME-GEF Project of 38 million USD for market transformation and adoption of energy efficient technology in MSMEs has been submitted for approval of GEF. o Defence Offset Policy and provision of 30% sourcing from Indian companies with a 1.5 multiplier for sourcing from MSMEs; o Collateral free credit support through CGTMSE Scheme, the exposure of the fund has reached more than 85,000 crores till date; o Support to industrial clusters for creation of Common Facility Centres (CFC) and infrastructure development under MSE - CDP scheme. o National Manufacturing Competitiveness Programme(NMCP) for MSMEs to support in Design, Incubation, Innovation, Technology Up-gradation, market support, product certification, cleaner production; The emphasis has also been placed on skill mapping and creation of industry responsive skilled manpower through effective training of educated youth in both conventional and advanced production and management technologies. The Ministry is in the process of skill need mapping in each district based on various parameters i.e. clusters, products made and the institutional anchoring needed over there. 3

4 o Industrially verified modular courses and course wares have been prepared by the Tool Rooms and Technology Development Centers, which is an exemplary scalable model for quality skill up-gradation in the country. The courseware prepared is being translated in various regional language to wider dissemination and usage. The courseware for management related inputs are also being prepared to impart soft management skills to students, prospective and existing entrepreneurs. o The Ministry have established 10 MSME- Samsung Technical Schools under Public-Private Partnership (PPP) mode this year. It is planned to train more than 10,000 unemployed youth in these technical institutions and to make them employable. All the 10 centres have started functioning. The trained youth have started getting employment and some of them has started running their own small ventures in consumer electronic service related fields. Ministry has recently launched web portal Digital Employment Exchange for Industries. The digital employment exchange is in line with the Prime Minister s vision of Digital India wherein through this employment exchange for industries, job seekers can find employers and vice versa. Therefore, it is utmost important that these skilled hand get a platform where they can find livelihoods for themselves. Thus, this facility will enable industrial units find suitable manpower and job seekers find suitable jobs. 4

5 In the light of the recommendation of Kamath Committee on financial architecture of MSME sector Ministry has taken initiative to develop one page simplified registration form Udyog Aadhaar under which MSMEs will self certify its existence, bank account, business activity details and the basic information. The Ministry is in the process of consultation with State Govts. Before launching Udyog Adhaar. In order to improve the spheres of activities and take up new challenges of creating more employment opportunities and also providing the last mile assistance to the potential entrepreneurs of the future a large number of technologies are being developed by our research institutes, which have not yet been commercialized and which could give a boost to the rural economy. Keeping this in mind our Ministry has launched Scheme for promotion of Innovation, Entrepreneurship and Agro-Industry with a fund of Rs. 200 crore, which will open new vistas of incubation landscape for the micro segment of our vast rural industry. The Make-in-India call also seeks to identify and create a favourable eco-system for encouraging the start-ups and drive the manufacturing domain with sustained employment opportunity creation and to raise the level of skilling for successful and sustainable development. SFURTI has been revised on a much broader mandate basis so a to streamline and addresses issues on roadblocks and delays caused due to lack of clarity on in the existing guidelines. the major changes in guidelines of the revised schemes relate to approving the criteria 5

6 for selection of nodal agency, emphasis on backward and forward market linkages. The scheme now looks at economic development and job creation and allows for multiple products as the basis for clusters. It may be challenging to make the country as a manufacturing hub unless we foster technology and business incubations. The Ministry through its programmes supports establishing and running incubation centres in various engineering and management institutions including IITs across the country. We are also looking into that how the other IITs and IIMs can be roped-in not only for technology business incubation but also extending support to start-ups. It is expected that the TCSP with its Technology Centres would also fill in this gap by bringing Industry Associations, Academia and MSMEs on a single page. Sickness in MSMEs, Non-Performing Assets and Exit Policies are some of the areas which have been causing difficulties for MSMEs. In fact, there is no legal framework in place for reorganization, winding up or exit for small units. Consequently, it has led to huge waste of human resources, capital and physical resources. Therefore, there is need for special dispensation for revival and exit of MSMEs. M/o MSME has taken a major initiative in this direction. The Ministry has notified a framework for Revival and Rehabilitation of MSMEs under Section 9 of MSMED Act. Under this framework, any enterprise can seek revival and rehabilitation benefit though a 6

7 Committee constituted by banks with representatives from State Govts., experts and others. Though the country has MSME Development Act 2006, but the need National MSME Policy is being felt for a long. The Ministry has launched a Draft Consultation Paper on MSME Policy, which is uploaded on the website of DC-MSME. The comments and suggestions of stakeholders including industry associations have been sought. It would be of great assistance if the industry associations and state governments do come forward with their comments and suggestions at the earliest. It is share with august gathering that till date more than 1100 comments and suggestion have been received so far, which are being compiled for appropriate inclusions in the policy. The Public Procurement Policy (PPP), which was notified in April 2012, is completing three years of its inception. The mandatory provision of 20% procurement from MSEs by CPSUs/Department and Ministries will be effective from 1 st of April The Ministry has taken various steps to sensitise the Central Government Public Sector Undertakings, Department and Ministries in this regard. Various awareness programmes, Vendor Development Programmes and one-to-one interaction meetings with CPSUs have been organised by the Ministry to take on board all the stakeholders and to ensure effective implementation of the policy. 7

8 This is the right time that not only CPSUs in particular but also the Industry associations through their members should gear up to create a strong demand and supply chain for a win-win situation. This would also help in production of cost effective items and import substitution, which in turn give impetus to Make in India initiative. MUDRA Bank stands for Micro Units Development Refinance Agency (MUDRA) has been launched on , which will benefit small entrepreneurs and will also act as a regulator for 'Micro-Finance Institutions (MFIs). Since small entrepreneurs are businesses are often cut off from banking system because of limited branch presence, Mudra Bank will partner with local coordinators and provide finance to "Last Mile Financiers" of small/micro businesses. The Bank will be set up with a corpus of Rs 20,000 crore and a credit guarantee fund of Rs 3,000 crore. The bank will cater to 5.77 crore small business units that are spread all across India who currently find it difficult to access credit from the regular banking system. The Prime Minister said that MUDRA scheme is aimed at funding the unfunded. He said that the small entrepreneurs of India are used to exploitation at the hands of money lenders so far, but MUDRA will instill a new confidence in them that the country is ready to support them in their efforts that are contributing so heavily to the task of nation building. It is felt that with limited footprint of the Ministry across the country, many a times information regarding schemes and programmes are 8

9 not disseminated up to the farthest beneficiaries. The role of Industry Associations becomes of a paramount importance in such situation. Therefore, the Industry Associations can play a bigger role to bridge this gap and act as a facilitator in extending policies and programmes of the government. In this direction, the Ministry along with QCI has already started accreditation of the Industry Associations for taking them formally on board and it would not be out of place to share that the Industry Associations are coming for BMP accreditation and some of them have got Diamond and Gold accreditation in the recent past. This of course is beginning of new era of associating worthy stakeholders in programme implementation. **** 9

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