“The Mission of our government is to eradicate poverty by creating more jobs in rural, agricultural and tribal segments of our society. We aim to enhance the contribution of these segments in our GDP by increasing the turnover of the village industry from Rs. 80,000 crore today to Rs. 5 lakh crore in two years. The government is also working with State Bank of India to launch an E-portal for MSMEs to sell their products, on the lines of Amazon. Today, Amazon generates Rs. 70,000 crore revenue for small enterprises in India annually. In order to protect the interest of MSME vendors, the government has mandated public sector undertakings to settle dues within 45 days of sale. We are also planning to introduce legislation to ensure prompt settlement of MSME dues,” said Mr Nitin Gadkari, Honourable Minister of Micro, Small and Medium Enterprises, Government of India at a webinar organised by All India Association of Industries (AIAI).
Mr Gadkari reiterated the aim of the government to increase the share of MSME sector in total exports from the current 48% to 60% in the years to come. Indian MSMEs should compete with global brands by forming joint ventures with start-up enterprises or through technology transfer from premier institutions such as IITs and IIMs.
He highlighted the innovative initiatives taken by his ministry to develop high quality, sustainable and cost-effective local products to substitute imported goods. The minister informed, “Local MSMEs have successfully developed indigenous paint variety, Khadi Prakritik Paint, that is made of cow dung, which meets global standards and yet 50% cheaper than established brands. Small enterprises can produce this cost-effective paint with a capital investment of Rs. 15 lakh. The government is providing 7-day entrepreneurship training for cattle owners on how to monetize livestock waste products such as cow dung and urine. Cattle owners can generate up to Rs. 4500 a month by selling cow dung and cow urine at the prevailing price of Rs. 5 per kg dung and Rs. 10 per litre urine.”
He said, “The success of the Atmanirbhar Bharat programme lies in finding cost-effective, eco-friendly and high-quality local substitutes for imported goods.” The minister further informed, “Indian farmers can save up to Rs. 1 lakh per year by replacing fossil fuel with biofuel and bio CNG in their tractors and farm machinery. Government is promoting biofuels by encouraging the production of ethanol from rice and other food grains, biomass from straws of cotton, wheat and rice. There is also huge scope for producing bagasse and bio CNG as a substitute for fossil fuel. India can reduce the annual crude oil import bill of Rs. 8 lakh crore by promoting biofuel.”
He expressed confidence that India will emerge as the leading manufacturer of electric vehicles and conventional automobiles. The government will soon approve the scrappage policy to stimulate demand in the automobile sector. The size of the Indian automobile sector is Rs. 4.85 lakh crore, of which Rs. 1.45 lakh crore is from exports.
Earlier in his welcome remarks, Mr Vijay Kalantri, President-All India Association of Industries (AIAI) highlighted the key challenges faced by the MSME sector in recent years. He pointed out, “Access to timely and adequate credit at reasonable interest cost is a major challenge faced by the sector. In the last 10 years, the share of bank credit to the MSME sector has declined from 12.3% to 8.5%. Even though the government announced emergency credit guarantee scheme for MSMEs amidst the COVID pandemic, more than 70% of the fresh credit is adjusted by banks against existing loans of the beneficiaries, which limits the benefit of the scheme.”
He suggested that the interest cost on MSME loans should be brought down on par with those for housing loans. Mr Kalantri also recommended the government to rehabilitate State Finance Corporations (SFCs), many of which have become defunct in recent years.
Referring to other challenges of MSMEs, Mr Kalantri pointed to the rising cost of raw materials, petroleum products and complex regulatory compliance burden. He suggested, “Government should ensure that MSMEs have access to raw materials at a globally competitive price.” He also emphasized on the need for effective implementation of government schemes in letter & spirit, improving ease of doing business and promoting one district one product scheme (ODOP) at the grass-root level.
Mr Kalantri concluded his remarks by pointing out that the Hon’ble Minister is a Man of Action and the MSME sector is fortunate to have him as a minister. He exuded confidence that under his leadership the Indian MSME sector will be globally competitive.”