For a man who has built a reputation being a hard core Hindi heartland politician, he deals with complex matters of business and economy with equal ease. Driving the fortunes of India’s fledgling Micro, Small & Medium Enterprises (MSME) sector, Kalraj Mishra has many aces up his sleeves. Mishra, who launched on January 7, 2016 SMEpost.com, a digital media platform to enable and empower SMEs in India, is extremely bullish on the sector. Sharing his strategies on how to give the big leg-up to the MSME sector, the energetic MSME Minister expects the upcoming budget to jump-start the job creation. Excerpts of Kalraj Mishra interview with SMEpost.com Editor K R Sudhaman
Q: At the outset many thanks for formally launching SMEpost.com. The timing of SMEpost launch is quite positive given that the Prime Minister Narendra Modi is launching ‘Start-Up India, Stand-Up India’ and vigorously pursuing ‘Make in India’ campaign that would in a way boost MSMEs. As part of your strategy to give a boost to the sector, share new initiatives you propose in the New Year? What set of concessions and measures you expect in this year’s budget?
A: SMEs lead to the effective development of the nation. To make India a developed country, an overall growth is required. With agriculture contributing towards production as well as reducing unemployment, similarly there is another sector which plays a major role in encouraging entrepreneurship, job creation and effective utilization of raw material which is SME.
Prime Minister Narendra Modi had initially said that we will make India a manufacturing hub and for that he emphasises on ‘Make in India’. ‘Make in India’ means a huge amount of investment and this investment will further expand the SMEs.
In respect of procurement policy, there were some difficulties in ensuring that large companies got 20% of their procurement from SMEs as per government order issued in 2012. We have now sought to remove these difficulties by making it mandatory for public sector undertakings to procure 20 per cent from SMEs from April 1, 2015. Also, we have set up a committee to monitor under the supervision of the Secretary to ensure that PSUs adhere to the order.
With the increase in NPAs and the presence of large number of sick units, we have also focused on Revival and Rehabilitation of the Small and Medium Enterprises. The bank will assess whether the assets of MSMEs are performing or non-performing through a corrective action plan committee approved by RBI.
Boosting Entrepreneurship
To boost the entrepreneurship spirit, we have launched a scheme ‘ASPIRE’ focusing on promoting innovation, expansion of rural industry and entrepreneurship. For this, we have sanctioned an amount of Rs.200 crore. Till now, 15 livelihood incubation centres have been set up. Our vision is to reach upto 500 such centres across the nation. More than 100 livelihood centres have already been set up, several of them under Public Private Partnership Model.
We have also focused on developing Coir Industries, which is mainly in Southern India to generate the spirit of women entrepreneurship. A majority of women have been employed in the coir industries. We have taken the initiative to increase the financial assistance from Rs 5 lakh to 10 lakh per unit under ‘Coir Udhyami Vikas Yojana’ and also to ensure the cluster development.
We have strengthened the Scheme of Funds for Regeneration of Traditional Industries (SFURTI) to encourage women artisans. The scheme will attempt to enhance cluster development to take on the challenges of highly competitive open market through product development. For further promotion of clusters, common facility centres have been introduced.
Cluster Development
With a view to strengthen infrastructure in the clusters at least Rs 10 crore is sanctioned for creation of common facility centres.
Heritage (Traditional) sector employing from 1,000-2,500 artisans is provided Rs 8 crore. Major cluster employing between 500-1,000 artisans, is sanctioned Rs 3 crore. Mini cluster employing upto 500 artisans is given Rs 1.5 crore.
We are also working towards machine upgradation and encouragement of artisans. On the basis of this, the entire industrial sector will be technically upgraded, be it mechanical, quality or designs to transform ‘Make in India’ into ‘Made in India’ in the global market through working capital and raw material support.
From marketing outlook, more than 1.03 lakh crore credit guarantee trust coverage has been provided benefitting more than 22 lakh units.
Through Prime Minister Narendra Modi’s ‘Start-Up India, Stand-Up India’ and ‘Skill India’ initiatives, we are trying to bridge the gaps which stunt economic growth. We want job seekers to become job providers. There are two schemes: Incubation Centre Scheme for strengthening the startups and Prime Minister Employment Generation Programme (PMEGP) for setting up small industries in the rural area.
Under PMEGP, financial assistance of Rs. 5-25 lakh is provided. A subsidy of 25% in rural area, 15% in urban area and for women, SC, ST and Naxal affected area – 35% in rural area and 25% in urban area is provided in the form of margin money under the Credit Linked Capital Subsidy Scheme.
We have set up Rural Self Employment Training Institute for skill development of the entrepreneurs through self skill development programmes.
These are the various initiatives which we proposed to take them forward in the forthcoming budget.
Q: Khadi will provide jobs in rural areas and even you want to do a lot about it. What are the new initiatives you are going to take to promote marketing of Khadi?
A: To promote Khadi in the global market, our Prime Minister Narendra Modi had appealed to the citizens in ‘Mann Ki Baat’ to buy one cloth of Khadi each. He had also appealed before Diwali to purchase ‘diyas’ made by potters, which was very successful.
To compete in the global market, we have launched Khadi t-shirts, suits and denim Khadi. We have also promoted the Khadi designs across the world made by state-level artisans.
During the recent India-Africa Summit, delegates had expressed their demand for Modi jackets, kurtas and caps. US President Barack Obama too is fond of Modi Kurta and Japanese Prime Minister Shinzo Abe wears ‘Modi Jacket’.
Under Khadi Reform and Development Programme (KRDP), we have received support from Asian Development Bank which has helped around 300 units. This includes modernization of Charkha to make Khadi trendy and contemporary.
From the marketing point of view, Market Development Assistance (MDA) Scheme in which a rebate of 20% of the actual production against sanctioned target was provided. It has now been increased to 40%. As a result, there is a lot of improvement in Khadi.
Q: You have launched Udyog Aadhar Memorandum (UAM). The scheme has received a very good response. Is there any time frame to register around four crore MSMEs in the country and will the unregistered ones be denied benefits under the scheme?
A: I personally feel that there are many difficulties which entrepreneurs face for setting up venture. These obstacles must be eliminated to transform India into a manufacturing hub. We have taken a very big initiative by setting up Udyog Aadhar Memorandum to reduce these hurdles in registration of small and medium industrial units.
Entrepreneurs used to face a lot of difficulties in getting them registered so we have simplified the process by creating an online web portal on a single web page consisting of 20 important points necessary for the registration.
Earlier they had to spend a lot of money, run from pillar to post and had many queries. Now, within three minutes entrepreneurs can receive their registration number. In this age of due diligence, there cannot be a better initiative than this.
Till now 1, 30,000 entrepreneurs have registered online under the universal UAM. For this, our aim is to register more and more entrepreneurs. One entrepreneur can register for more than one of his ventures.
Regarding benefits, the unregistered entrepreneurs will not be as liable in terms of exports and subsidy for various schemes as the registered ones.
Q: There is a lack of working capital for MSMEs mainly with respect to timely payment from big players. The law states that they should receive payment within 45 days mandatorily, but they never receive within this time. What could be the possible solution to this?
A: To tackle the issue of timely payment, the government has formed a committee under the supervision of the MSME Secretary Anup Pujari. The monitoring is under process. I expect the problem to be resolved soon.
