16th Edition of INTEC

Speech/Talking Points for Hon’ble Minister (MSME) for his inaugural address at 16th Edition of INTEC scheduled on 9th June 2015 at CODISSIA Trade Fair Complex.

Respected Shri Ponnuswamy and the esteemed guests and participants. It gives me immense pleasure to be present at this 16th INTEC – 2015 organized by the CODISSIA, Coimbatore. It is also heartening to learn that this Conclave showcased the products of SMEs with special emphasis upon the importance of quality as a strategy for empowerment of SMEs. I welcome all participants of this fair and call upon them to rise to the occasion following the clarion call for ‘make in India’ and ‘zero defect zero effect’ made by our esteemed Prime Minister Narendra Modiji.

The MSME sector is a nursery of entrepreneurship, often driven by individual creativity and innovation. This sector accounts for 36% of total industrial production, 40% of total exports and contributes very significantly to the GDP. Manufacturing segment contributes to 7% of GDP and services contribute to 30.5% of GDP. The total contribution of MSMEs to the GDP is 37.5%. The MSMEs provide employment to over 80million persons through over 36 million enterprises producing over six thousand products. The geographic distribution of the MSMEs is also more even. In recent times the growth rate of the MSME manufacturing sector has been much higher than that of the large Manufacturing sector. Thus, MSMEs are important for the national objectives of growth with equity and inclusion.

The success of the sector can be partly attributed to good governance in the sector in the form of sufficient legal backing and operation of various Schemes/Programmes of the Ministry and their continuous monitoring. The MSME Development Act 2006 has provided the long awaited legal Framework for promotion and growth of MSME Sector. During 2013-14, we have trained 6, 07, 253 persons and in 2014-15 we trained 8, 12,486 persons to enable them to acquire gainful employment/self-employment in the sector.

Availability of adequate Credit is always a major issue for growth and sustenance of the MSME Sector. In this regard MSME Ministry has taken significant initiatives. Under the Credit Guarantee Scheme, the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) has facilitated collateral free loan to about 18.5 lakh Micro and Small Enterprises till 31st March, 2015. The Ministry of MSME 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, 35533 units have availed subsidy of Rs. 2068.18 Crore till 31st March, 2015. Marketing is one of the critical areas where MSMEs face problems.

World over public procurement is a major market for the MSMEs. Towards enhanced support to the Micro and Small Enterprises in participating in Government procurement, Government has announced Public Procurement Policy for MSEs under which 20% of the total procurement of any Government Ministry/Department/Public Sector Enterprises is to be procured from the Micro and Small Enterprises, compulsorily after the current year. Again with a focus on inclusivity, the policy has a separate target of 4% of the total procurement from the Enterprises owned by persons from Scheduled Castes and Scheduled Tribes. To enable the Micro and Small Enterprises to avail the benefits of the policy as well as to sensitize the procuring agencies, Ministry has taken a number of initiatives. We are conducting more than 400 vendor development programmes all over India per year to make the MSMEs aware about the requirements of the public sector. We are also organizing stakeholders meeting with the important purchasers in the public sector.

We are supporting the MSEs in upscaling their quality standards and productivity under the 10 Schemes of National Manufacturing Competitiveness Programme (NMCP). These schemes have demonstrated tremendous success in the last few years across the country. The Ministry is also developing infrastructure for the MSME Clusters under the IID Component of Cluster Development Programme. It is worth mentioning that a total of 965 interventions in various clusters as well as 171 Infrastructure Development (ID) projects have so far been under taken in different States and Union Territories of the country under the programme.

A web based ‘Virtual Cluster’ has been launched on 1st March, 2015 which will act as an one stop repository of information besides being the platform for networking amongst various stakeholders like Academia, Research and Technical Institutions, Financial Institutions and Banks, Students, Industries (MSMEs) and Professionals. Few institutions and industries have already been registered on the website.

The Make in India Strategy aims to facilitate investment, foster innovation, enhance skill development and build manufacturing infrastructure in the country. The real objective of this Strategy is to ease the investment caps and controls to open up India’s industrial sectors to global participation. This is a well drawn out Strategy and is the most relevant for India’s MSMEs. The ‘Make in India’ strategy does not solely mean inviting the multinationals, but it urgently emphasizes to get our house in order in order to convert India into a manufacturing hub. The ease of doing business in the country should be improved. The Consultation Process is already underway to minimise the multiplicity and complexity in labour laws and the Inspector Raj involving a huge category of penalties under different Acts.

The Ministry of Micro, Small and Medium Enterprises (MSME) has been assigned a target of training 1.5 Crore youth by the year 2022. Ministry is gearing up to train around 42 lakh youth during the 12th Plan period (2012-17). The road map of the Ministry of MSME to achieve the target of training 8.5 lakh youth every year during the 12th Five year Plan involves adoption of training through Public Private Partnership (PPP) mode; setting up of benchmark training institutions, particularly in backward and difficult regions; developing uniform industry specific course curricula etc. The hallmark of the skill development programmes of the Ministry shall be a transparent web based system for online, real time registration of applicants, monitoring of programmes and follow up with the trainees through a dedicated call centre. There will be a back- to-back arrangement for maintaining an all-India data base on skill requirement of various sectors of MSME universe and skill sets available through the training programmes, which will ultimately function as a virtual employment exchange. Small and Medium Enterprise(SME) division of Ministry conducts training programmes though National Level Entrepreneurship Development Institutes (EDIs) (namely, NIMSME, Hyderabad; NIESBUD, New Delhi and IIE, Guwahati) and Technology Incubation Centers (TICs) and Technical Service Centres of NSIC. SME division of the Ministry implements Assistance to Training Institutions (ATI) Scheme for skill development programmes. Agro and Rural Industries Division of Ministry conducts training through Multi Disciplinary Training Centres (MDTCs) of KVIC, Training Centres of Coir Board and Mahatma Gandhi Institute for Rural Industrialization (MGIRI). Ministry implements PMEGP scheme and HRD scheme through KVIC and Mahila Coir Yojna through Coir Board for skill development programmes. Under the Office of DC(MSME
) ten Tool Rooms and Training Centres have been established at Aurangabad, Ahmedabad, Bhubaneshwar, Guwahati, Hyderabad, Indore, Jamshedpur, Jalandhar, Kolkata and Ludhiana with the objective of providing services to the Indian Industries by way of precision tooling and well trained craftsmen in tool and die making. 15 new Tool Rooms under the Ministry are being set up with World Bank assistance during the 12th Plan period. Tool Rooms are catering to high end technology needs of the MSME Sector by providing training in State of the Art machines to the prospective workers as well as by providing advanced tooling. Tool Rooms under the Ministry are supporting MSMEs to supply components to organization like ISRO, DRDO etc.
Availability of collateral free credit at reasonable rates is one of the biggest problems facing the MSME Sector in India. Also there is virtual absence of venture capital funds, angel funds and innovation funds in India. ‘Make in India’ campaign can attract the foreign corporate/ investors to bring in their investment, set up venture/angel funds to take advantage of the inherent depth of the MSME Sector in terms of range of products and services and marketing networks. The Ministry will also rise to the challenge through action plans directed at provision of collateral free credit, creation of state verticals for extending guarantees to the entrepreneurs of particular state with financial support from state governments, creation of verticals for women entrepreneurs and youth among SC/ ST and NE Regions.

The Ministry has the objective of creating an ecosystem through Technology Centres (TCs) to support MSME Clusters for global competitive manufacturing. This is proposed to be done through setting up of 15 new Technology Centres with World Bank assistance, augmentation of 18 existing TCs with new technologies and testing facilities supported by Cluster Network Mangers (CNM) and a National Portal. The CNM would create a web that increases business opportunity for MSME through new market linkages, provides interactive platform for Industry-Academia-Institutions, establishes closer cooperation of key innovation stakeholders and facilitates closer cooperation amongst skill development and labour market stakeholders.

Competitiveness and Productivity of the sector is also aimed to be augmented through simplification and upscaling of Lean Manufacturing Competitiveness Scheme, Design Clinic Scheme, QMS/QTT Scheme and ICT Scheme etc. MSMEs are the key drivers of innovation and serve as incubators for new technologies and ideas. There is a need to encourage MSMEs to adopt innovative ideas and concepts for the promotion of their business. Supportive interventions towards product and process innovations, diversification and larger market access will help the sector to grow and emerge as a major global player. Efforts are on to bridge the gap between Research Institutions and Industries through signing of MOUs with IISc and CSIR. Skilling is one of the most important drivers of job creation and is crucial for the development of vibrant formal small and medium sized (SME) enterprises. It enhances productivity growth and can also help find practical business solutions to social and environmental challenges. The emphasis has 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. This would be supported by institutional anchoring in the form of creation of Indian Enterprise Development Service and Web based Employment Exchange for Industry. The proposed new Scheme for promotion of Innovation, Entrepreneurship and Agro-Industry under the Ministry will surely make a decisive breakthrough in generating more employment in the MSME sector.

I would expect that this Fair besides doing great business, will also make some concrete steps for the involvement of participants in designing and developing Policy/Programme to support SMEs in India in general and Tamilnadu & Southern States in particular.

I wish this Fair all success and congratulate the organisers for the successful conduct of this fair