Furnishing details on data bank compulsory for SMEs: Secy MSME

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Saurabh Gupta | 20 Sep, 2016
Secretary, Ministry of Micro, Small and Medium Enterprises (MSME), K K Jalan has urged the Micro, Small and Medium Enterprises (MSMEs) in the country to update the details of their enterprises on the MSME data bank. This, he said was mandatory the updated data would be used for evolving parameters for the growth of MSMEs in the country.

Delivering the inaugural address at the FICCI-CMSME's sixth annual MSME Summit on the theme 'Propelling MSME Growth: Ways & Means', Jalan said that the government was also planning to identify 25-30 sub-sectors in MSMEs and focus on these sectors for raising productivity and enhancing the overall landscape of MSMEs.

He said that there was a need to carry out academic work in the space to understand the challenges and issues of the sector. He suggested that FICCI should come out with knowledge papers focusing on the specific concerns of the sector.

Speaking about the financing aspect of the MSMEs, Jalan said that there was a need to carry out research in this area as it has been seen that SME credit by banks was going down. He suggested that for MSMEs, a dedicated financing institute could be established like private sector non-banking financial companies (NBFCs).

Jalan said that in the MSMEs, manufacturing has been the focus area but now was the time to look at MSME in a holistic perspective. MSMEs in services, training, retail and wholesale and ancillary industries of big companies, traditional set ups, should also be given due importance. He added that employment generation and import substitution should also be focused on.

On the occasion, Jalan released the Institute of Small Enterprises Development (ISED) & FICCI-CMSME knowledge paper on 'Improving Ease of Doing Business for MSMEs: A Review of Union and State Initiatives in India'.

Pannuda Boonpala, Director, ILO India, said that In India, the Government's efforts to support the MSME sector through initiatives such as Make in India or Start Up India reflect the importance of this sector to national development, and hold great promise. As part of its contribution to strengthening the MSME sector, the ILO in India has introduced programmes such as the 'Start and Improve Your Business' (SIYB) to help set up micro- and small enterprises and to run and expand them successfully, and, for more established SMEs, the 'Sustaining Competitive and Responsible Enterprises' or SCORE programme, which helps improve productivity, competitiveness and job quality of SMEs.

She said that about 10,000 persons have been trained in SIYB, with an average business start-up rate of about 55 percent, and a job creation rate of 2.4 jobs per enterprise, while beneficiaries of the SCORE programme, which has so far been implemented in 100 factories thanks to a network of 20 trainers, have reported improvements of 20 percent or more against key industry benchmarks such as process efficiency, reduction in defects, or on-time delivery. She added that the key objective for the coming years will now be to upscale these programmes and to ensure their sustainable implementation.

Highlighting the challenges for MSME sector, Sanjay Bhatia, President, FICCI-CMSME and Managing Director, Hindustan Tin Works Limited, said that to propel MSMEs there was a need to build an enabling environment for MSMEs.

The Government was already working on a MSME Policy, but he suggested that the MSME Policy document must contain some provision for sector specific dedicated industrial estate/ clusters for MSMEs with the support from State Government. Also, micro enterprises should be exempted from all compliance, inspection and labour laws for certain period. A guide could be provided to them on the compliances that they need to adhere to in those years. In order to make MSMEs grow vertically, MSMEs should be facilitated with the tax benefits linked to direct employment generated by MSMEs and Start-up businesses. As per policy benefits, MSMEs adopting latest clean and green technologies across sectors should be incentivized by the government. The Government should look for a possible collaboration with institutions which can help MSMEs in their R&D activities.

Bhatia said that financial assistance should be provided to those units who have successfully adopted and are adopting Quality Standards (TQM), energy efficiency standards and environmental norms, etc. Going forward, units which complied with the latest systems and standards should be encouraged to participate in Government/PSU tenders by providing them the incentives such as EMD/ Security deposit exemptions.

In his concluding remarks R Narayan, Vice-President, FICCI-CMSME and Founder & CEO, Power2 SME, said that the IT had the power to propel MSME growth with the ability to extend revenue-making opportunities by selling products and services online. MSMEs could also utilize modern technology and the internet as the medium to reduce procurement costs and thus reduce overall cost of goods sold to improve profitability.

Dr. A Didar Singh, Secretary General, FICCI & FICCI-CMSME, said that the programme 'Make in India' should focus on MSMEs as it is the sector which will generate employment and not the big industries where manpower was being replaced with technology. He added that the objective of the summit was to create awareness and understanding among the Indian MSMEs on the various schemes and initiatives being taken by the government and private institutions/organizations for the development of MSME sector.