Year
End Review 2007
The year 2007 saw a phenomenal growth and paradigm shift in the micro,
small & medium enterprises sector. There has been a perceptible change in
recent times in the concept of ‘Small Scale Industry’. The immense growth of
small units led to the recognition of ‘micro’ industry, which found shape in
the Micro, Small & Medium Enterprises Development Act, 2006.
The Government has taken several steps during 2007 that have gone a long
way to help the Micro, Small & Medium Enterprises sector, some of which
are enumerated below:
NOMENCLATURE CHANGES
The
President under Notification dated 9th May 2007
amended the Government of India (Allocation
of Business) Rules, 1961. Pursuant to this amendment, Ministry of Agro and
Rural Industries (Krishi Evam Gramin Udyog Mantralaya) and Ministry of Small
Scale Industries (Laghu Udyog Mantralaya) were merged into a single Ministry,
namely, “Ministry of Micro, Small and Medium Enterprises (Sukshma Laghu aur
Madhyam Udyam Mantralaya)”.
NEW WEBSITE LAUNCHED
A
new website of the merged Ministry of Micro, Small and Medium Enterprises
(www.msme.gov.in ) was launched by the minister for Micro, Small & Medium Enterprises, Shri
Mahabir Prasad on 30 August, 2007.
DE-RESERVATION OF MSME ITEMS
With a view to providing the MSME sector opportunities for technological
upgradation and promotion of exports, items reserved for exclusive manufacture
by MSME have been de-reserved from time to time. The de-reservation process
involves extensive consultation with all the stakeholders. Based on the consultations
with the stakeholders and on the recommendations of the Advisory Committee,
various items have been de-reserved from the exclusive list of MSME. Presently
there are 114 items reserved for the MSME sector.
UNORGANISED WORKERS
The National Commission
for Enterprises in the Unorganised Sector (NCEUS), under the Ministry of Micro,
Small and Medium Enterprises presented two reports to the Prime Minister,
Dr. Manmohan Singh on 5th November,
2007. The two reports are on the ‘Financing
of Enterprises in the Unorganised Sector’ and on ‘Creation of a National Fund
for the Unorganised Sector’ (NAFUS). The recommendation on the creation of a National
Fund follows from the first report.
The report on ‘Financing
of Enterprises in the Unorganised Sector’ deals with financing of the enterprises
in the non-farm unorganised sector. It
examines in depth the status of financing of the sector and deals with deficiencies
in institutional infrastructure and constraints in financing this sector.
The Report, besides giving its recommendation on financing has also
made a recommendation for the creation of NAFUS.
The second Report submitted to the Prime Minister deals in details
with the recommendation of creation of NAFUS.
The Report on NAFUS gives the rationale, organizational model, functions
and sources of financing of the Fund. The
mandate for the creation of this Fund derives from the National Common Minimum
Programme of the UPA Government.
The National Fund proposed
by the Commission is envisaged as a statutory body funded by the Central Government
and Financial Institutions that will primarily focus on non-farm micro enterprises
with investment of less than Rs. Five lakh. The Commission’s report reveals that this segment
constitutes 94 per cent of all small enterprises estimated at 58 million in
2007 with a total employment of 104 million. This Fund would be created on
the pattern of NABARD and exclusively meant for meeting the financing and
promotional assistance gaps in the development of the Non Farm Unorganised
Sector. Being a statutory body it would
leverage funds from the market and national and international institutions
to meet its objectives.
Earlier, the National Commission for Enterprises in the Unorganised Sector
advocated a “13 Point Action Programme” under four separate packages
that should get “overriding and immediate priority”, for the unorganized sector
workers, in a report presented to the Prime Minister Dr. Manmohan Singh on
8 August
2007.
NATIONAL BOARD FOR MSME
The National Board for Micro, Small
& Medium Enterprises was constituted in accordance with Section 3 of the
Micro, Small & Medium Enterprises Development Act 2006. the First Meeting
of the Board was held in New Delhi on June 20, 2007.
The second meeting of the National Board of Micro, Small & Medium
Enterprises was held in New Delhi on 18th September, 2007 under the chairmanship of the Minister of
Micro, Small & Medium Enterprises, Shri Mahabir Prasad. The main topic of
the agenda for the Second Meeting was
related to consideration of a draft Procurement Preference Policy for
Micro and Small Enterprises.
The
main agenda of the third meeting, held in New Delhi on 13th December
2007, was ‘Marketing Efforts of National Small Industries Corporation’
(NSIC).
Representatives
of MSME Associations and Trade Unions, from all over the country and senior
officials of various ministries from the central as well as the state governments
participated in all the three meetings.
PROMOTIONAL PACKAGE
The Government undertook specific schemes during the year
for encouraging upgradation of technology to meet global challenges to SSIs.
It has already announced a “National Manufacturing Competitiveness Programme”.
A comprehensive “Package for the Promotion of Micro and Small Enterprises”
was announced on 27.02.2007. Together, they provide for fiscal support, support
for cluster based development, technologies & quality upgradation support,
marketing support, support for entrepreneurial and managerial development
and other support measures. Further, the Micro Small and Medium Enterprises
Development (MSMED) Act, 2006 has been formulated as a response to the long-standing
demand of the SSI sector, the emergent need to provide a legal framework to
address the developmental concerns of what is globally known as “small and
medium enterprises”.
CLUSTER DEVELOPMENT
The Government continued
to support cluster development programme during the year.
Industrial cluster occupies
the driver’s seat for propelling economic activities in Micro & Small
Enterprises (MSE) sector. The Ministry of Small Scale Industries (now Micro,
Small & Medium Enterprises) laid special emphasis for development of cluster
and launched a scheme Technology Upgradation and Management Programme called
UPTECH in 1998. Although it was having a cluster based approach for development
of MSE, but was mainly technology-focused comprising of diagnostic study,
setting-up of a demonstration plant and organising workshops, seminars, etc.
for quicker diffusion of technology across the cluster of small enterprises.
Later, in August 2003, the scheme was renamed as Small Industry Cluster Development
Programme (SICDP) and made broad based by adopting holistic pattern of development
of the cluster encompassing marketing, exports, skill development, setting
up of common facility centres, including technology upgradation of the enterprises,
etc.
SICDP guidelines were
comprehensively revised in March, 2006 making the cluster programme more
broad-based by facilitating substantial economics of scale in terms of
deployment of available resources in the medium to long term. The Government of
India’s assistance under the scheme was enhanced upto Rs.8 crore to support
soft as well as hard intervention, including setting up of common facility
centers.
As per the Promotional Package announced by
the Government, SICDP was renamed as Micro & Small Enterprises - Cluster
Development Programme (MSE-CDP) to make it more attractive, though basic
features of this scheme have been retained as such. The proposals for setting
up new clusters shall now be considered under MSE-CDP and the quantum of grant
has been raised to 75% of the cost and the project cost has been raised from
Rs. 5 crore to 10 crore. Raising the project cost to Rs. 10 crore and the
central grant upto 7.5 crore is quite attractive and is expected to encourage
the setting up of new clusters for micro and small enterprises.
Cluster approach is different from the concept
of development of Industrial Estates. The latter is largely based on
infrastructure development and creation of new assets, whereas, cluster
development aims at holistic development (covering diverse areas like marketing,
export promotion, skill upgradation, infrastructure etc.) and may be designed
to cover industrial estates as well as natural clusters, which may have evolved
on their own historically at any place. The government identified more than
3000 SME clusters of artisan-specific, village and small enterprises in India
and took up 1150 such clusters for intervention and improvement.
NATIONAL AWARDS
Prime
Minister Dr. Manmohan Singh presented National Awards to the Micro Small and
Medium Entrepreneurs in New Delhi on 30 August 2007. The Awards were in three categories: a) Outstanding
Entrepreneurs of Micro & Small Enterprises, Khadi and Village Industries
and Coir Industries; b) Special Awards to Women and SC/ST Entrepreneurs and
c) Banks for Excellence in Small Enterprises Lending. Total 111 entrepreneurs got awards in various
categories. 14 entrepreneurs received awards from the Prime Minister, while
Shri Mahabir Prasad, Union Minister for Micro, Small & Medium Enterprises
presented awards to the rest of the awardees.
KVIC’S GOLDEN JUBLIEE
The
President Smt. Pratibha Devisingh Patil inaugurated the concluding session
of KVIC’s Golden Jubilee Celebration function in New Delhi on 19.11.07.
The
President also dedicated to the nation an electronic charkha which not only
produces yarn but also generates power for lighting a lamp and playing a transistor
radio.
The
Finance Minister Shri P.Chidambaram, was the Guest of Honor. He released two Commemorative coins of Rs.5 and
Rs.50.
ASEM
MINISTERIAL MEETING
The Union Minister of Micro, Small
& Medium Enterprises Shri Mahabir Prasad
attended the Asia-Europe Ministerial Meeting (ASEM) on Small &
Medium Enterprises in Beijing, China on
31 October, 2007.
China hosted the ASEM SMEs
Ministerial Meeting, with a view to deepening
dialogue among governmental agencies of ASEM members in charge of SMEs, discussing
policies and measures for better adapting to globalisation, creating sound
SMEs social service policy and supporting system, improving SMEs capacity
of innovation and competitiveness, enhancing cooperation among SMEs in ASEM
members, strengthening regional cooperation of industrial clusters, and expanding
mutual investment areas.
PROMOTION
OF COIR PRODUCTS
The Coir Board under the
Ministry of Micro, Small & Medium Enterprises continued its efforts to
popularise coir products in the domestic and international markets. Coir Board
opened a new Display and Information Centre in New Delhi on August 29, 2007.
It organised India International Coir Fair in Kochi from 7-11 December 2007.
The fair generated a great deal of domestic as well as overseas trade inquiries.
NSIC’S
EFFORTS
National Small Industries
Corporation (NSIC) took certain steps to
help the micro & small entrepreneurs in a big way. For this, a number
of new schemes were launched like distribution of steel, copper etc. providing
financial assistance in collaboration with banks, providing export credit
insurance with the help of ECGC, helping new entrepreneurs through incubators,
implementing Performance and Credit Rating Scheme, signing of MoUs with small
scale entrepreneurs’ organisations etc. As a result of which NSIC made profit
and paid dividend to the government during the year.
ENTREPRENEURSHIP
DEVELOPMENT
Various Entrepreneurship
Development Programmes and Buyer-Seller Meets were organised during 2007 to
provide assistance and support to micro & small entrepreneurs.
The three autonomous
institutes under the Ministry viz. The National Institute of Entrepreneurship
and Small Business Development (NIESBUD), Indian Institute of Entrepreneurship
(IIE) and National Institute for Micro, small and Medium Enterprises (NIMSME)
continued their efforts in research and training programmes for
entrepreneurship development during the year. National Institute of Small
Industry Extension Training (NISIET) was renamed as National Institute for
Micro, Small and Medium Enterprises (NIMSME)
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MG/SR
(Release ID :34166)