The significance of Micro, Small & Medium Enterprises (MSMEs) to India’s economic growth and prosperity is well established. While they provide critical depth to both manufacturing and service sectors, they also foster entrepreneurship and of course generate substantial employment.
A number of policy initiatives and schemes announced as part of Budget 2016 is much welcome and is expected to enable & empower the MSME sector be the growth engine of Indian economy.
Establishment and development of Khadi and village industries in rural areas has always been an area which has the potential drive socio-economic development. Khadi production in the FY 2016-17 is expected to reach Rs. 1300 crore, generating employment for 19.5 lakh people. To enable this providing assistance to MSMEs in marketing their products and services in domestic and global markets is critical. Rs. 341 crore earmarked in Budget 2016-17 under Marketing Promotion Development Assistance (MPDA) scheme for Khadi and Village Industries Commission (KVIC) should provide a big impetus. Apart from conventional marketing strategies like exhibitions and events, the power of digital media has to be leveraged to build brand ‘Khadi India’.
Similarly, Coir Industry is a labour intensive industry and provides scope for generating maximum employment with limited investment. Rs. 43.56 crore earmarked for assisting Coir Board should be seen as more as an enabling initiative towards pushing coir exports. As a post Budget MSME ministry statement mentioned, this allocation is expected to increase the production of Coir products to more than 5.5 lakh metric tonnes while creating employment for more than 7.25 lakh people and help exports to the tune of Rs. 1,500 crore.
Building Manufacturing Competitiveness is an essential prerequisite if Indian SMEs has to be the locomotive of ‘MAKE IN INDIA’ initiative. Lean manufacturing, technology upgradation, quality certification and support for entrepreneurial and managerial development of SMEs is very critical. Efficient and Clean Energy Technology, waste management are other major areas of focus. All such and more initiatives has to be cluster specific to build SME competiveness. Rs. 52 crore allocated under National Manufacturing Competitiveness Programme (NMCP) for the financial year 2016-17 should be seen as the first step in this direction. Indian SME sector has a long way to go in this regard. MSMEs battle obsolete technology, unskilled manpower.
MSME Tool Rooms & Training Centers is a good concept and can play a significant role in providing technology support. As part of Budget 2016 announcements, the government plans to set up 15 new technology centres at the cost of Rs. 2,200 cr with World Bank assistance and Rs. 75 cr will be spent during the year 2016-17 for opening of new Tool Rooms.
Simultaneously, there will also be the need to develop and execute well thought through awareness campaigns, conduct cluster specific workshops and put in place international exposure and study missions to build technology edge. SME sector focused Digital media platforms can play an enabling role in amplifying such awareness campaigns and knowledge initiatives. Collaboration with government have to be forged by digital media platforms.
But the biggest of all the initiatives is the allocation of Rs. 1,139 crore under the Prime Minister’s Employment Generation Programme (PMEGP). This is expected to generate employment for more than 4,25,000 people. The utililisation of the allocation under PMEGP will assist 55 thousand projects with Margin Money
Yet another key initiative is the allocation of a sum of Rs. 100 crore under ‘A Scheme for Promotion of Innovation, Rural Industries and Entrepreneurship’ (ASPIRE). The government seems very keen at promoting economic activities in rural pockets and this allocation will be utilized to set up 45 Livelihood Business Incubators (LBIs) and 25 Technology Business Incubators (TBIs). ASPIRE will create new jobs, foster the spirit of entrepreneurship at district level, while facilitating innovative business solution for un-met social needs, and promoting innovation to further strengthen the competitiveness of MSME sector.
39 clusters under Scheme of Fund for Regeneration of Traditional Industries (SFURTI) would be approved with an approximate cost of Rs. 60 crores. It would be benefiting more than 10,000 artisans. The Scheme is meant for the Artisans engaged in traditional Industries including Khadi. SFURTI focuses on making traditional industries more competitive with more market-driven, productive, profitable and sustained employment for traditional industry artisans and rural entrepreneurs.
Rs. 200 crore allocated for FY 2016-17 for Performance & Credit Rating Scheme will enable MSMEs be credit ready. Rating of SMEs has worked wonders in getting bank loans and there are empirical evidence to suggest ratings have changed thousands of SMEs into vibrant enterprises.
Growth of India’s SME sector will not only contribute to the process of economic development, but will also lead to equitable distribution of national income and regional dispersal of enterprises by way of mobilization of capital and entrepreneurial skills. Policymakers, business leaders, and independent platforms like SMEpost.com has to enable & empower unlocking the immense potential to SMEs in India. Its growth is essential and is extremely crucial to the future of India’s growth.
Small is the new Big. Let’s make it bigger!