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MSME policy for 12th Five-Year Plan needs to look at broader issues
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Bikky Khosla | 14 Jun, 2011
There is no doubt that the MSME policy for the 12th Five-Year Plan (2012-17) period needs to look at broader issues rather than staying myopic and concentrating on issues like cluster development, micro-finance, and venture capital. Till today, all policies and programmes pertaining to the sector were nothing but short-term and 'stop-gap arrangements'.
Despite the immense potential of the sector, I see no programmes or policies that can provide an impetus to innovation which is imperative for the sector. It is usually seen that we wait for a crisis to grow before taking crisis mitigation policies that are aimed at short-term corrections. Long-term polices still elude the sector. Also missing is the eagerness of financial institutions and banks to invest in entrepreneurship.
The policy should also dwell on issues of better infrastructure, enhanced productivity, cost competitiveness and improved quality to create products for domestic and overseas markets. So far, a concerted effort or a platform wherein MSMEs can share information with suppliers, buyers, workers and other stakeholders for overall growth of the sector and subsequently of the economy is interestingly missing.
What's sad is the fact that both development and sustainable growth of the sector is being hampered due to obsolete technology usage. Most players in the sector are still unaware of the global technological advances in their respective area of operation. The MSME policy should look at helping the sector in improving product quality, efficiency in raw material consumption, and improvement in individual skills to be able to compete with global players.
Today, the MSME sector in the country contributes about 40 percent to the GDP with an estimated value of goods and services worth Rs 20 lakh crore, employing six crore workers in 2.6 crore units across the country. The question is 'Can we ignore this sector any longer?"
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facilities offerd to the MSMEs
V. Siva Kumar | Sun Jun 26 01:28:51 2011
We are one of the msme we want to know mor about the facilities offered to us by the govt ment. We are also ignored by govt. undertaking for not having thr ESI PF and are not willing to allow us participate in tenders
Appreciation
Rajendra Dave | Sun Jun 19 05:58:32 2011
Dear sir,
we are thankful for your good office,
your information, detailed newsletters and website giving us guidance to grow from Micro to small to medium enterprise.
WARM REGARDS,
RAJENDRA DAVE
FOR, MRG-SYNERGY BUSINESS CONSULTANT,
GUJARAT.
NO MSME
Sougam Maity | Fri Jun 17 21:33:10 2011
I am a entrepreneur from Kharagpur for last 4 years working with software mainly in the field of academic to enhance learning and the learning processes. I have also send a proposal to MSME but no result, only hardware people got the funding and also their turnover was more than 10 crores. I dont think it is actually helping them who really need, rather than people who have connections and already established
long term policy for improving the MSME
mukesh trivedi | Fri Jun 17 15:25:50 2011
WE can not ignore this sector any more as this sector is growing at a faster rate as a banker of a rural bank i feel that this sector can give more employment to the rural masses.More attention should be given on training and sharing the information about the buyers and suppliers.
MSME Policy
C.R.Badrinath | Thu Jun 16 06:03:49 2011
There are some schemes to improve productivity & quality. But unfortunately the MSME development Institutes (DI)are ill equipped with non qualified staff to promote the schemes.
All staff are performing mundane activities of poor quality Skill development training programmes.
All programmes are fit only for taluk level, but are being conducted in state & district Levels in association with mediocre NGO institutions.
A lot of money is spent on the training programmes without any quality audit & progress on the ground.
Programmes are target oriented and not result oriented.
There has to be a through review of the standard & quality of out put by a third party on the activities of development Institutes.
Unless the delivery mechanism , for the promotional schemes, are strong, and implemented with a conviction of purpose , all efforts will be wasted.
All training programmes are for grass root level. None of the Development Institutes have any database on industries, Technology oriented projects for prospective entrepreneurs , technology data banks etc.
There are practically no visitors to the office as information based services pertaining to Industrial needs are not provided by most offices.
Developmental work needs motivated & dedicated officers which is missing today.
Computerization has not brought about any improvement.Linkages with other developmental Government organisations across India is not there.
Target oriented programmes will never deliver.
Broader issues
Allan D'souza | Thu Jun 16 01:59:52 2011
Thanks.
Very thought provoking.
MNC'S and Corporate overrated
A.K.BOSE | Wed Jun 15 11:24:55 2011
Attitude of Government for MSME is step motherly.It appears that it has been framed to discourage existing and new entrepreneur so that the corporate sector, Multinational Companies can invade the area of business generating INR 20 Lakh crore.
On every budget placed it may be noted that for MSME hardly any benefit has been passed on in comparison to others (MNC'S or Corporate sectors) who really do not contribute in building up core industries to compete world market though manufacturing ,instead they are importing assemblies , draining out foreign exchange for domestic market camouflaging themselves as traders which Government may or my not knowingly adopts special favor to these Industries.
An account should be drawn out to what extent all sector really contribute by them selves with out taking help of import,own technology development competitive to global manufacturer and quality acceptable in International Standard.
Government should have monitoring cell genuinely made to monitor in to the problem of MSME,activities with strict control on funding ,buisness revenue and above all to make them at par with international standards quality.
The quality assurance authority BIS must be so formed that it should be recognised world wide,like CE and FDA.It is pitty to note that for domestic purchase buyers including Government sector is setting mandatory condition that the quoted item should be CE Certified over riding BIS Certification.Where we stand as a Nation?
New Taxation Laws for enhanced GNR
NVSN Murthy, Scientist | Wed Jun 15 07:36:52 2011
Government must standardize, logicalize, rationalize and simplify taxation laws since India is losing huge money on account of poor, cumbersome, ineffective and inefficient taxation laws.
Unless we address this problem, India cannot see the light and Indian economy cannot grow.
For this, we need to abolish all concessions, exemptions and tax reliefs.
We need to merge all taxes into one and this unified tax shall me named as NATION BUILDING FUND (NBF).
Practically, NBF need not exceed 2% on all goods and services since A SALE IS A SALE WHETHER IT IS A FIRST SALE OR A SECOND SALE OR A TENTH SALE.
Also, A SALE IS A SALE WHETHER GOODS OR SERVICES.
We need not have different terms and different departments like – Income Tax, Sales Tax, Excise Duty, Customs Duty, Service Tax etc.
After several years of thorough research, this proposal is made years ago and no action is taken so far.
If all taxes are fixed at 2% and if this 2% is collected directly at source, India’s gross national revenue (GNR) will be at least five times more even without any rise in GDP.
Lack of adequate knowledge
Tyaba Ali | Wed Jun 15 05:52:45 2011
There is an urgent need for streamlining the various labour laws and reports which need to be submitted. Excise regulations though much clearer than before are still vague and archaic in many respects. There is no central agency which can respond to specific queries – as to the various formalities which need to be done before effecting any change. Every department will talk only of its self and since the information is not easily available it is always easier to go through a dalal, the unofficial way so that next time there is a change in the officer there is a loop hole which he can find. Regards, Tyaba Ali, Oriole Electronics Pvt Ltd
MSME 12th Five Year Plan
Raj Bhatia | Wed Jun 15 05:20:21 2011
Your editorial well covers what needs to be covered under 12th Five Year Plan for MSME. I would like to add that MSME should be educated/ informed with new technologies on products, applications, etc. There should also be emphasis on training. No company can survive, leave aside progress, if it fails to adopt new technologies.
Detailed Point-wise Plan
Ipshita | Wed Jun 15 04:04:53 2011
Policies are passe. Too much is written about them, too much energy spent and the actual outcome cannot still be quantified.
What is required for MSME today is a detailed point-wise plan like an employee's KRA, KPI with clear scales for measurement of only success or failure nothing in between. Once that is done a periodic (quarterly maybe) review of the performance should be done to see what is working, what is not, why it is not working and what immediate rectifying measures should be taken. Most large cos are thriving on small scale industries - auto, pharma, FMCG but what are they doing for them. Technology and finances are a must for SMEs to compete at a global level. Very good and timely article.
MSME Policy
Prem P Madan | Tue Jun 14 23:20:58 2011
We are an engineering company operating from Pune in high tech. critical oil and gas sector. We agree that it is very difficult for small units to grow and build resources. The activity calls for modernization, but volumes do not support. Public sector companies play games and of late do not hold any responsibilities and pass on the buck to others and being large and resourceful are able to getaway with also. Banks do not support difficult situations. Banks and financial institutions though rich, consider one cr., two cr. as big money. These days no infrastructure or building or machinery can be build with such small funds. We need to re-think, and need to provide up-to 100 cr. on diluted securities, if we desire to upgrade small units to medium and large. The working of PSUs needs to be reviewed, and a sense sharing the responsibility needs to be brought in. Individuals need to be held responsible for not sharing responsibility and passing the buck. We need to create a large scale awareness about products, components, volume manufacturing, quality infrastructure and in every district, every town and help the individual companies perform. The role of district industries sector need to be reviewed and all district centers need to be headed by a board of industries heads, who can work towards promotion of industrialization goals at volumes that are competitive. The Govt. needs to spend in building national quality even if it costs to exchequer. China and Korea have done much better!
Import duty on silk yarn
Narendra Kapoor | Tue Jun 14 17:26:47 2011
After long pendind demand of Varanasi Silk industry Government reduced the import duty from 30% to 5% giving great relief to weavers of silk but Karnataka
sericulture lobby apposing it without any solid ground.
Last week Mr.Anand Sharma, Commerce Minister assured Karnataka sericulture people to re-consider the duty cut.
In this connection I want to present few points:
India produces about 18000 metric ton of SILKYARN against consumption of 28000 MT and this gap of 10000MT is filled by import of silk from CHINA which is need of industry as RAW MATERIAL.It gives a value addition of 100% to weavers/saree traders and exporters.
Further Indian silk have no match with CHINA silk in quality.Chinese silk can be used as it is whereas Indian silk used after twisting.Some items of TEXTILES produced by only CHINES SILK not by Indian silk so Karnataka should not appose the cut in import duty.
Instead of apposing the cut in import duty Karnataka should increase production of SILKYARN and that too of International quality.
We as Indian prefer to buy Indian SILK
but at present need China Silk at reduced duty rate.
Narendra Kapoor
Former President Eastern UP Exporters Association,Varanasi.
Lean concept should be introduced into this sector
Narasimha Naidu | Tue Jun 14 17:14:23 2011
Yes, I fully agree with what you have said. All the actions till are like short time actions. If this sector has to improve its productivity ,improve quality we need to introduce Lean manufacturing into the system. This is a great tool where the wastes in the manufacturing is eliminated or minimised and improves the productivity.by this we sustain in a long run. This is my they point and also a recommendation from my side
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