Spotlight

New Delhi, 10 March 2007

MICRO AND SMALL ENTERPRISES

NEW DELHI, March 11 (INFA): The micro and small enterprises (MSEs) contribute around 39 per cent of the country’s manufacturing output and 34 per cent of its exports. It provides employment to around 29.5 million people in the rural and urban areas of the country.

The process of economic liberalization and market reforms, while exposing the Indian MSEs to increasing levels of domestic and global competition, has also opened up attractive possibilities of access to larger markets and of stronger and deeper linkages of MSEs with larger enterprises.

Improved manufacturing techniques and management process can be sourced and adopted with greater ease.

A robust and vibrant MSE segment can derive the benefits of these new opportunities, provided appropriate enabling policies are put in place and measures for capacity building in public- private mode are also initiated.

In this environment of competition and rapid technological changes, the segment can then achieve higher sustained growth by enhancing its technological capabilities, improving its product and service quality to global standards and seeking ways of innovation.

The Government has taken several initiatives and measures during the year to enable MSEs enhance their competitive strength, address the challenges of competition and avail of the benefits of the global market. They include: Enactment of the Micro, Small and Medium Enterprises Development (SMED) Act, 2006.

Amendment to the Khadi and Village Industries Commission Act, 1956 introducing several new features to facilitate professionalism in the operations of the Commission as well as field-level formal and structured consultations with all segments of stakeholders. The new Commission has been constituted.

A package of Promotion of Micro & Small Enterprises has been approved recently to address most of the concerns in the areas such as credit, cluster-based development, infrastructure, technology, and marketing. Capability building of NSME Associations and support to women entrepreneurs are the other important features of this package.

An Empowered Group of Ministers (EGoM) under the chairmanship of the External Affairs Minister has been set up to lay down a comprehensive policy for cluster-development and oversee its implementation.

Under the Credit Guarantee Scheme, life insurance cover for chief promoters of units provided guarantee cover by the Credit Guarantee Fund Trust for Small Industries (CGTSI) has been introduced. Further, the one-time guarantee fee under the scheme has been reduced from 2.5 per cent to 1.5 per cent with effect from April 1, 2006.

After due consultation with the stakeholders, 180 items reserved for exclusive manufacturer in micro & small enterprises have been de-reserved on May 16, 2006 and 87 such items have been dereserved on January 22, 2007.