MSMEs contribute 45% of the total industrial output constituting 40% of the country’s total exports. The sector employ about 60 million people and create 1.3 million jobs every year. No wonder the Government has launched so many initiatives like Mudra Bank, Stand Up India, Start Up India, Pradhan Mantri Employment Guarantee Programme etc for this sector. But is the Government laying enough emphasis?
What is the annual budget of the MSME Ministry that contributes almost half of the goods manufactured in India – a paltry Rs. 3465 crore, a minuscule amount considering the annual budget size of about Rs. 20 lakh crore rupees. It is only 0.18 per cent of the total budget allocation for planned expenditures. The budget allocation for the MSME Ministry has gone up by only 600 crores- from Rs 2700 crore in 2011 – during last six years.
In a survey conducted by Greyhound knowledge Group for news portal Firstpost three years ago, 80 per cent SMEs listed lack of finances as the factor which was obstructing their business.
It’s heartening to see so many schemes have been launched by the Government of India to arrange for finances for this sector. Yet, it’s a pity that the finances are not reaching them or rather they are not aware of these schemes. This is more than evident from the fact that only 8 lakh MSMEs have so far enrolled for Udyog Aadhar Memorandum though there are 5.1 crore MSMEs in the country.
The key organisations under Union Ministry for MSMEs are National Small Industries Corporation (NSIC), Khadi and Village Industries Commission (KVIC), the Coir Board, and four training institutes – National Institute for Entrepreneurship and Small Business Development (NIESBUD) located at Noida, National Institute for Micro, Small and Medium Enterprises (NI-MSME), Hyderabad, Indian Institute of Entrepreneurship (lIE), Guwahati and Mahatma Gandhi Institute for Rural Industrialisation (MGIRI), Wardha.
But, even out of this small set up, the Government has taken out NIESBUD and given to Ministry of Skill Development. May be the purpose is noble but Skill Development is a new ministry and without a robust infrastructure. While Ministry of Skill Development was trying to put its act together, it has been saddled with additional responsibility of managing NIESBUD. It would have been better had the institute which is all about entrepreneurship and small businesses, been kept with MSME Ministry.
Most of the new schemes launched are aimed at promoting entrepreneurship, but most of them are not with the Ministry of MSME. For example, Mudra – Micro Units Development & Refinance Agency Ltd. Provides loans up to Rs 10 lakh, but is being handled by the Ministry of Commerce. Any enterprise which needs Rs 10 lakh funds, would apparently fall under MSME category. The stand Up India scheme aimed at helping out budding entrepreneurs among SC/ST, OBC and women by giving loans from Rs 50 thousand to Rs 10 lakh, is with the Finance Ministry. Similarly, the ambitious Start Up India scheme is being run by Department of Industrial Policy and Promotion (DIPP) under Ministry of Commerce and Industry.
MSME Ministry should be the nodal agency for all initiatives like Stand Up India, Start Up India and Mudra, which are meant to enable & empower the MSME sector.
Launching new schemes is a big deal. It requires lot of planning. But, even bigger task is to make every scheme a success. And that can be achieved though cohesive working and linear planning.