Govt mulls comprehensive policy for MSME sector

Hyderabad: In order to revitalise the micro, small and medium enterprises (MSMEs), the Union government is all set to bring in a comprehensive policy in the next three to four months, according to Kalraj Mishra, Union Minister for MSME.

“We have initiated discussions with all the stakeholders including industry associations and state governments to bring out a single policy for entire country aiming at strengthen the small and micro entrepreneurs and transform India as manufacturing hub,” Mishra told reporters on the sidelines of a day’s workshop on MSMEs organised by Council for Small Manufacturing Industry here on Tuesday.

Though refusing to elaborate on the precincts of the proposed new policy, the union minister said, “…there is a need to define the parameters of MSME in terms of value, products, credit, subsidies and benefits.”

For instance, there are norms for extending credit by banks up to Rs one crore to MSMEs without taking collaterals, but it is not been properly implemented for various reasons. “We want to plug these short-comings, as we (Govt) want to strengthen the smaller units in the nation building,” he pointed out.

The government has already constituted a committee with three departments connected with the issue like finance, industry etc. The committee is expected to give its recommendations on the definition of the MSME, he added.

On extension of credit to MSMEs, the minister said that his ministry had already held consultations with industry associations across the country and next will he will have a meeting with the bankers to know their problems. “We have created ‘credit guarantee fund’, which will extend guarantee to the MSMEs, wherever is need, to get bank loan,” he said.

On the marketing of the product manufacturing by the MSMEs, the minister said that there is a norm to buy the government and public undertakings up to 20 per cent of their requirement directly from MSMEs.

The women, SC and ST entrepreneur units will get 4 per cent reservation, which the government wants to make mandatory from 2015.

Earlier delivering the inaugural address, the union minister said that the government has already set up various training institutions to improve the knowledge and capabilities of the entrepreneurs and the workmen. However, he felt there was not much awareness of these institutions, hence the government now consider to create awareness among the entrepreneurs and students. This apart, the government plans to strengthen the training capabilities at the high technology level by expanding Tool Rooms.

As of now, the government runs about 18 such high-end institutions across the country. It plans to extend the Tool Rooms to 15 more locations, he added.

Further, the government is also planning to use the web technology in according permissions, which the entrepreneur needs to visit at least 15 to 16 approvals to set up a unit. “We want to simplify the procedures, so that, those apply small, medium shall get approvals without interacting with officials,” the minister said.

Speaking on the occasion, the Telangana Finance Minister E Rajendra said that the union government has to support the state in terms of power shortage. “We can offer land, fraud-free administration and quick approvals, but power is not in our hands. I request the union minister to use his good offices in getting at least 1000 to 1500 MW power to save the state,” he said.

Using the platform, the finance minister urged the youth to take up entrepreneurship, instead of settling for employment. “Though small industry only we can distribute wealth, which is now held up in the hands of few,” Rajendra said.