Juxtapose this with some of the comparative advantages that we enjoy like abundant raw materials that ensures low-cost manufacturing inputs, government of India’s invitational Foreign Direct Investment policies, digital transformation that is ensuring transparency and ease; there has probably never been a better time to ‘Make In India’. Unlocking the full potential of this initiative and achieving set targets will, however, require progress in a host of areas.
SME Driven Economy
One of the key focus area has to be in terms of enabling & empowering India’s Small and Medium Enterprises (SMEs). The SME sector has long been the engine of growth of our business & economy. Close to 45 per cent of the total manufacturing output and 40 per cent of the country’s exports is contributed by India’s SME sector. The sector is the largest generator of employment after agriculture. The SME Sector has played a very significant role in terms of balanced and inclusive growth and contributes to the process of economic development, equitable distribution of national income and regional dispersal of enterprises by way of mobilization of capital and entrepreneurial skills. However, there is far unlocked potential to SMEs in India. Our government while pushing the growth & development agenda has to enable and empower SMEs to be the growth engine of ‘Make in India’.
Be it Auto & auto components, defense manufacturing, aviation, biotechnology, chemicals, construction, electrical machinery, gems & jewelry, electronic systems, food processing, leather or media and entertainment the ‘Make In India’ initiative has the potential to transform India into a manufacturing hub while facilitating investments, fostering innovation and building the best in class manufacturing infrastructure in an environmentally friendly way.
Skill Power
To power ‘Make in India’, one has to harness a vast pool of skilled manpower. Vocational training and demand driven training modules based on Modular Employable Skills is the need of the hour. Budget 2016 has to earmark funds and enable ‘easily implementable’ schemes for the same. Schemes that does need one to go through pages and pages of documents to submit proposals to government agencies. It should be simple, transparent, and flexible to allow enterprising individuals and early stage start-ups with relevant industry experience and expertise to participate in Entrepreneurship & Skill Development initiatives.
That brings me to the much talked about issue of ‘Ease Of Doing Business’. For SMEs, this is much more important than anyone else. Budget 2016 should set the agenda for reducing complex procedures and compliance’s. SMEs need to have a single window mechanism that serves as one-stop shop service for all business related compliance, with provisions that ensures time bound clearances.
Empowering The Clusters
A critical area of focus needs to be in the area of Quality Assurance. Cluster development programmes that nurtures best practices for quality assurance should get a boost in Budget 2016. A quality consciousness has be imbibed through SME cluster initiatives that involves raising awareness, assessing, counselling and hand holding SMEs to build their competitiveness in the global marketplace.
Staying with this aspect of Cluster development programmes, another area of focus should be sustainability. Budget 2016 should facilitate SME education initiatives that informs about the importance being environment friendly and what kind of steps can help prevent air pollution, how to manage liquid discharge, solid waste etc. Usage of renewable sources of energy should be enabled through effective skill development programmes for implementation of the same. Budget 2016 should facilitate this. And of course, aggressive tax benefits should be made available to the users of green technologies to incentivize and popularize clean energy sources.
For the success of ‘Make In India’ initiative, SMEs will need to build competitiveness and drive operational efficiency by acquiring requisite technology to be and remain globally relevant. Budget 2016 should facilitate funds to build an empowering ecosystem that enables technology training, acquisition and development for SMEs specific to Clusters.
Last but not the least, an early implementation of GST will facilitate reduction in multiplicity and complexity of applicable taxes and enable seamless movement of goods across country and lower the production costs. Implementation of GST will reduce amount of time and effort on part of SMEs and thereby enhance the overall output in the SME sector.