The Micro, Small and Medium enterprises sector has a key role cut out in shaping India’s GDP growth in the 12th Plan period. Addressing the two-day, inaugural function of India Global Summit on MSMEs 2011- Innovation: Changing the Indian MSME Landscape here today the Minister of Micro, Small and Medium Enterprises, Shri Virbhadra Singh said that the MSME Sector has contributed immensely towards the Indian growth story enabling the country to maintain a steady rate of growth even in the face of worldwide economic decline/meltdown. He said that even though adversely affected by the depressing global economic environment especially since 2008, the performance of the Sector has been somewhat consistent.
Elaborating on the achievements of the sector, Shri Virbhadra Singh said the Sector consisting of 26.1 million units, as of today, provides employment to over 60 million persons. The Sector through more than 6,000 products contributes about 8% to GDP besides 45% to the total manufacturing output and 40% to the exports from the country. The Sector is expected to perform an equal important role during the 12th Five Year Plan Period (2012-13 to 2016-17) in enabling the country to achieve the envisaged overall growth rate of 9% during the Plan.
At the India Global Summit on MSMEs, 2011 organized by the Confederation of Indian Industries (CII) with the support of Ministry of Micro, Small and Medium Enterprises, Shri Singh said the summit, has provided a singular opportunity for Indian MSMEs to demonstrate their capabilities to a global audience as well as open up new opportunities for partnerships.
The Minister emphasized that given the current global scenario, the only way that Indian MSMEs can remain competitive is by adopting innovation as a key business strategy. He further added that National Innovation Council has been constituted by the Prime Minister to encourage and promote innovation in every sector of the economy and MSME sector has got a special emphasis under this Innovation Council and a Sectoral Council has been constituted for the MSME sector and has started functioning under the Chairmanship of Secretary (MSME). Stating that the Ministry of MSME is implementing the National Manufacturing Competitiveness Programme (NMCP), he said it includes programmes like establishment of new Tool Rooms, enhancing of product and process quality, cost reduction through lean manufacturing techniques, design clinic, etc. Out of these 10 components, one component i.e. incubator scheme especially cater to the needs of supporting innovative ideas. Shri Virbhadra Singh expressed satisfaction that specific tailor made programmes are also being organized for the skill development of socially disadvantaged groups like OBC, SC, ST, minorities and women.
Shri Virbhadra Singh said the Government has accorded high priority to the MSME sector in key national developmental programmes and assured the gathering that the Ministry will consider and act upon key recommendations made at the summit. Stating that the Government has introduced a whole gamut of schemes to support MSME initiatives, the Minister urged the entrepreneurs to fully leverage the support systems and schemes that have been put in place. Noting that global alliances and partnerships have assumed key significance for MSME growth, he said that his Ministry will continue to encourage Indian MSMEs to participate in international fairs and exhibitions. He said the presence of delegates from 47 countries at the summit was a key milestone in the direction of international MSME cooperation.
The Minister said, the Government has set up a Credit Guarantee Fund Trust for Micro & Small Enterprise (CGFTMSE). Under the scheme, credit facilities extended to micro and small enterprises are guaranteed upto 75% of the amount in the event of a default. The Performance & Credit Rating Scheme of the Ministry is a very unique way of empowering the small enterprises to face internal and global competition. Under this Scheme, financial assistance to the extent of 75% is provided for rating of MSMEs by a third party national or international rating agency. This rating benefits the units in many ways like establishing their creditworthiness, which helps them in accessing quicker and cheaper credit.
Shri Uday Kumar Varma, Secretary, Ministry of Micro, Small & Medium Enterprises in his special address said the MSME sector is fundamental to India maintaining growth with equity. A significant number of MSMEs are owned by people belonging to the disadvantaged sections of society. For instance, nearly 13% of MSMEs are owned by women entrepreneurs. Hence, the sector forms a key piece of the inclusive growth process. Stating that the MSME sector is at the threshold of big transformation powered by innovations, Shri Varma said the challenge lies in institutionalizing the initiatives that drive innovation. The MSME Innovation Council plays an important role in this, he said. Shri Varma said that while key sectoral challenges like access to easy finance, technology and markets are being addressed; in the 12th Plan period the focus will be on building MSME global competitiveness. He also said that MSMEs will continue to account for 40-50% of the GDP growth, and added that the defence-offset policy has created new growth avenues for the sector.
Source: Press Information Bureau , 19 October 2011