MSME : 'Focus on Innovations & Skill Development'

The main focus of Union Minister of Micro, Small and Medium Enterprises (MSME) Shri Kalraj Mishra is at innovations and skill development. Talking to Organiser Senior Correspondent Pramod Kumar he discusses his agenda and vision for the growth of MSME sector. Excerpts:

• What are the key schemes that have made a mark in MSMEs?

India Aspiration Fund (IAF) and Soft Loan Fund for Micro, Small & Medium Enterprises (SMILE) were launched in August 2015 to provide soft loan, in the nature of quasi-equity, and term loan on relatively soft terms. The ‘Start-up India, Stand up India’ scheme is to promote bank financing for start-ups and offer incentives to boost entrepreneurship and job creation. Equally, Micro Units Development and Refinance Agency (MUDRA) Bank, launched in April 2015, grants loan in three segments—up to Rs. 50,000 (Shishu), up to Rs 5 lakh (Kishore ) and upto Rs. 10 lakh (Tarun). Similarly, the Digital Employment Exchange is a platform where industries and job seekers can find employers and vice a versa. MSME is going to be a major plank in the Make in India drive. Supportive interventions towards product and process innovations, diversification and larger market access will help the sector to grow and emerge as a major global player.

• What are you doing to encourage innovation and R&D in MSME?

Our MSMEs are gradually looking for global footprints and in doing so they are trying to be innovative. We are setting up a dedicated fund—India Inclusive Innovation Fund—for promoting grassroots innovations with social returns as well as modest economic returns. The Fund would back enterprises developing innovative solutions primarily for citizens who lie in the lower half of India's economic pyramid, with limited physical and institutional access to basic services. The total corpus of this fund is proposed to be an initial minimum size of Rs 500 crore and maximum size of Rs 5,000 crores. We have also taken steps to operationalise Rs 200 crores fund for Technology Centre Network, Innovation, Entrepreneurship and Agro Industries. A nationwide “District level Incubation and Accelerator Programme” would be taken up for incubation of new ideas and providing necessary support for accelerating entrepreneurship.

• The MSME organisations feel that the government needs to work more at implementation level?

It was the position earlier, not now. We not only cleared 80 clusters during the last one year but also granted funds for them. Now one needs to fill just one page form on the website to register the industry and without providing any document or paying any amount one gets the registration number within minutes.

• It is alleged that the banks are not cooperating?

No. it is wrong. It may happen where people are not active. Loans are provided without any third party guarantee. It has proved very beneficial for those working in unorganised service sector. At some places the banks may fear whether they will get the money back or not. It needs to be monitored.

• Growing FDI is said to be hampering the growth of MSME?

I don’t think so. Considering the fact that MSMEs are increasingly looking for global footprints, FDI will act as a boon for the sector as it will bring in the necessary technical knowhow to MSMEs. The biggest advantage of the Bharateeya MSME sector is that a production process is already underway. So it is rather a matter of time for the FDI to set in.

• What about the use of IT and skill development in MSME?

We are very serious on it. We have started incubation centres through NSIC. About 10 centres are to be started by and about 100 will be opened in PPP mode. We have taken skill development very seriously.

• MSME sector seeks a panel to monitor adequate credit flow as suggested by the RBI time and again? What do you think?

It is already being monitored continuously and periodic reports are being sent to the Ministry. There is a need to devise an effective method of penalty and incentives so that the commercial banks fall in line.