LUCKNOW: Uttar Pradesh shelters about 4.4 million SME units – the highest in the country — with cities like Varanasi, Bhadohi, Moradabad and Aligarh carving out a niche for the world famous Banarasi saree, carpets, brassware and locks respectively.
The micro, small and medium enterprise (MSME) sector, which is a source of self-employment with low levels of capital, is believed to provide one of the quickest routes to correcting imbalances in a developing society.
Realising this fact, the state government is considering giving further boost to the financial institutes of Uttar Pradesh that especially includes Pradeshiya Industrial and Investment Corporation of UP (PICUP) and the UP Financial Corporation (UPFC), a top UP government official told the ‘SME post.com’.
According to an ASSOCHAM survey, Uttar Pradesh has emerged as the third leading state to facilitate growth in the small and medium enterprises sector. The survey suggests over 30,000 jobs were generated in UP, in the SMEs sector in the recent years.
Since women form almost 50 per cent of the population, this segment cannot be neglected if socio-economic challenges are to be addressed. Thinking along these lines, the Uttar Pradesh government started the Women Entrepreneurship Promotion Scheme 2014-15 to empower women and ensure their participation in the process of industrialisation.
Under the scheme, unemployed women are eligible for easy seed capital to start their own micro or small enterprise. The loan, provided by nationalised banks, financial institutions or the State Financial Corporation, is for the purchase of plant and machinery.
The beneficiaries are entitled to a loan of Rs 50,000 per year at five per cent interest, subject to a ceiling of Rs 250,000 in five years. This scheme is applicable to both manufacturing and service sector units, as defined by the Union MSME ministry.
Besides, under the cluster development scheme, the state government is encouraging micro-level and individual traditional industries and handicraft units to form a special purpose vehicle (SPV).
The collection of 25 or more such units would qualify for benefits under a scheme that seeks to boost traditional Indian craft such as chikankari, terracotta, zari, zardozi and toys.
Each cluster is a collection of homogenous units belonging to a particular industry.
The cluster comprises a common facilitation centre to aid in design, production, training, R&D, raw material storage, production display and information sharing. The Central government provides 70 per cent of the Rs 15 crore under the scheme.
Major MSME pockets in UP, include Varanasi, Allahabad, Moradabad, Saharanpur, Lucknow, Kanpur, Agra, Ferozabad, Meerut, Bhadohi, Ghaziabad, Noida, Bareilly, Gorakhpur, Khurja, Aligarh and Mathura.
These are generally product-specific hubs. Varanasi is famous for banarasi sarees, Agra and Kanpur for leather, Bhadohi for carpets, Moradabad for brassware, Lucknow for chikan, and Aligarh for locks.
To boost and reward innovation in public and private sectors, Uttar Pradesh government has recently decided to set up an Innovation Fund with initial corpus of Rs 50 crore.
The fund would provide financial assistance to innovation and research in the fields of governance, services, natural resources management, social sector, education and health.
The innovation fund would support new projects aimed at improving productivity, simplification of work culture, improving technologies related to micro, small and medium enterprises (MSME), enhancing transparency and accountability, disaster management, making services consumer friendly and improving quality in different sectors.
Under UP development agenda 2015-16, it has been decided to include both public administration and the unorganised sector in supporting innovation.
To encourage innovation and accelerate inclusive development, a high level State Innovation Council would also be reconstituted, the UP cabinet decided at its meeting chaired by Chief Minister Akhilesh Yadav recently.
An Innovation Cell would be formed in the state planning department to facilitate release of funds under the innovation council and innovation fund. The Cell would function as the secretariat for the council.
Projects worth over Rs 10 lakh would have to get clearance from the innovation council, as per the state cabinet decision.
The government is of the opinion that innovation is not the preserve of technology and could happen at the level of general public as well and the innovation fund would support such projects.