MSMEs play vital role to boost industry, employment: Muniyappa

KOLKATA: Union Micro, Small and Medium Enterprise Minister K H Muniyappa today stressed the need for coordination between the entrepreneurs, bankers and government to increase export of various MSMEproducts and make them globally competitive.

Muniyappa noted that the MSME sector contributes eight per cent of the country's
GDP, 45% of the manufactured output and 36 per cent of its exports.

"The MSME sector is the nursery of
entrepreneurship and has been recognised as the engine of growth. The MSMEs also have a vital role in the dispersal of industries and generation of employment opportunities," Muniyappa said while inaugurating a national conference on the sector here.

Calling upon entrepreneurs to set their export target at 50 to 60 per cent, the minister said that the sector provided employment to over eight crore persons through more than 3.6 crore enterprises producing over 6,000 products and was playing a significant role in fulfilling the national objectives of growth with equity and inclusion.

"However, to boost export in the sector, we need to upgrade our Research and Development (R&D) and marketing strategy to make the MSME produce globally competitive and acceptable products," the minister said.

The minister also called upon the nationalised banks to set up at least one dedicated MSME branch in each district throughout the country and urged them to reach out to villages, extending coordination to the MSME entrepreneurs.

Canara BankBSE -0.25 % CMD R K Dubey, who was present at the occasion, explained how they are progressing in this direction and have already established dedicated MSME branches in each district of Kerala. The two-day National Conference on "MSME Financing and Strengthening MSME Linkages" was organised by the Indian Chamber of Commerce. The conference would conclude tomorrow.

Speaking in the seminar, Deepak Narang, Executive Director of the 
Union Bank of IndiaBSE 0.03 % (UBI) said that out of the 19 districts in the state, they have already set up dedicated MSME branches in 10 districts, adding that soon, they would set up MSME branches in the remaining nine districts also. Similarly, the Bank would also set up dedicated MSME branches in all the districts of Northeastern states, he said.

Explaining the Centre's role in the sector, Muniyappa said the government is implementing the Credit Guarantee Scheme where it provided guarantee cover up to 85 per cent on collateral-free credit facility extended by lending institutions. The minister also lauded the growth of the MSME sector in a number of states including West Bengal, even as he wondered why this state was lagging behind in industrialisation. 

"East India Company began industrialisation in Bengal centuries back, but we don't understand why the state is still lagging behind. On the other hand, Maharashtra, Gujarat and several other states are progressing well," the minister said. 

He added: "The 12th Plan has earmarked Rs 24,000 crore to emphasise growth in industrialisation in the entire country as against Rs 11,000 crore earmarked in the previous Plan". 

Muniyappa said that being the nodal agency of entrepreneurship development in the country, the MSME ministry is providing skill development through its state-of-the-art Tool Room and Technology Development Centres to help youths. "We have a target of training 1.5 crore persons by 2022 and more than 40 lakh persons during the 12th Five Year Plan," he said. 

Giving importance to cluster upgradation in the MSME sector, Muniyappa said that in case of clusters owned and managed by women entrepreneurs, the contribution of the MSME ministry towards financial support could be up to 90 per cent of the project cost. 

The minister also said that the mandatory clause of procuring at least 20 per cent of MSME produce by the central government offices would promote the sector by improving their market access.