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Promotion of MSME



Promotion of MSME 

The Ministry of Micro, Small and Medium Enterprises (MSME) has taken following initiatives for promotion of MSME’s and to enable ease of doing business:


Under Udyog Aadhaar Memorandum (UAM) Ministry has notified a simple one-page registration Form UAM on 18.09.2015.  This is an important step to promote ease of doing business for MSMEs in India as the UAM replaces the filing of Entrepreneurs’ Memorandum with the respective States/UTs.  The information sought is on self-certification basis, no supporting documents are required at the time of online filing of UAM and no fees for UAM registration.

The Framework for revival and rehabilitation of MSMEs was notified by the Ministry on 29.05.2015 which provides a mechanism for revival and rehabilitation with a definite voice to the Entrepreneurs and is expected to balance the interest of debtors and creditors.  The framework enables Banks/creditors to identify MSME’s which are in the stage of initial stress and take corrective action to prevent them from becoming NPA’s.  MSMEs can seek revival and rehabilitation benefit through a committee constituted by banks with representative from State Governments, experts and others.

A Scheme for Promoting Innovation, Rural Industry and Entrepreneurship (ASPIRE) was launched on 18.3.2015 to promote Innovation & Rural Entrepreneurship through rural Livelihood Business Incubator (LBI), Technology Business Incubator (TBI) and Fund of Funds for start-up creation in the agro-based industry. During the year 2015-16, 22 LBIs & 2 TBIs have been approved and two LBI Centres have been operationalized at Deoria (U.P.) and Rajkot (Gujarat).

The Ministry of MSME is also implementing various schemes and programmes for promotion and development of MSME sector. The major schemes/programmes include Prime Minister’s Employment Generation Programme (PMEGP), Scheme of Fund for Regeneration of Traditional Industries (SFURTI), Credit Guarantee Scheme, Credit Linked Capital Subsidy Scheme (CLCSS), National Manufacturing Competitiveness Programme, Micro & Small Enterprises - Cluster Development Programme (MSE-CDP), Marketing Development Assistance, Skill Development Programmes, International Cooperation Scheme, etc.
The details of funds allocated and utilized during last three years and current year for plan schemes are as under:-
                                                                
Year
Budget Estimates
Utilization/ Expenditure
2012-13
2835.00
2229.52
2013-14
2977.00
2272.05
2014-15
3327.00
2384.57
2015-16
2612.51
1913.73*

                      *provisional till 29.2.2016

The Ministry of MSME’s Budget allocation which was Rs.2612.51 crore (2015-16) has been enhanced to Rs.3000 crore (2016-17).  This enhancement is 15% more than the previous year.  In terms of the recommendations of the Prime Minister’s Task Force on MSMEs (2010) chaired by the Principal Secretary to Hon’ble Prime Minister, the RBI has advised the banks, inter alia, the bank shall have to achieve a 20% year-on-year growth in credit to micro and small enterprises, allocation of 60% of the MSE advances to the micro enterprises and 10% annual growth in number of micro enterprise accounts.

To facilitate easy flow of credit to Micro, Small and Medium Enterprises (MSMEs), a Credit Guarantee Fund Scheme for Micro and Small Enterprises (MSEs) is being implemented under which guarantee cover is provided for collateral free credit extended to MSEs.  The Reserve Bank of India (RBI) has issued guidelines in May 2010, which mandatorily require banks to dispense without collateral requirement for loans upto Rs.10 lakh to MSEs.


National Small Industries Commission (NSIC) under the Ministry of MSME is implementing the Raw Material Assistance Scheme which aims at helping MSEs by way of financing the purchase of Raw Material (both indigenous & imported). Benefits under the scheme include the following:

1)                  Financial Assistance for procurement of Raw Material upto 90 days.
2)                  MSEs helped to avail Economics of Purchases like bulk purchase, cash discount, etc.
3)                  NSIC takes care of all the procedures, documentation & issue of Letter of Credit in case of imports.

In addition to ASPIRE, Government is implementing the following schemes for growth of the MSMEs sector under the 'Make in India' programme:

Prime Minister’s Employment Generation Programme (PMEGP) is a credit linked subsidy scheme, for setting up of new micro-enterprises and to generate employment opportunities in rural as well as urban areas of the country through KVIC, State Khadi & Village Industries Board (KVIB) and District Industries Centre (DIC).  General category beneficiaries can avail of margin money subsidy of 25% of the project cost in rural areas and 15% in urban areas. For beneficiaries belonging to special categories such as SC/ST/Women/PH/Minorities/Ex-Servicemen/NER, the margin money subsidy is 35% in rural areas and 25% in urban areas. The maximum cost of projects is Rs.25 lakh in the manufacturing sector and Rs.10 lakh in the service sector.  Since inception and up to January 2016, 3.50 lakh micro enterprises have been set up by utilizing margin money amounting to Rs.7004.40 crore.  29.82 lakh jobs have been created from these units.

Scheme of Fund for Regeneration of Traditional Industries (SFURTI) was launched in 2005-06 for making Traditional Industries more productive and competitive by organizing the Traditional Industries and artisans into clusters.  26 clusters have been granted final approval with a total project cost of Rs.72 crore benefiting around 25000 artisans.

This information was given by the Minister of State, Micro, Small and Medium Enterprises, Shri Giriraj Singh in a written reply to a question in Lok Sabha here today.

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Setting up of MSME Units 

The Ministry of MSME is implementing various schemes and programmes for the promotion and development of MSME sector across the country. The major schemes which provide credit linked subsidy to MSMEs include Credit Linked Capital Subsidy Scheme (CLCSS) and Prime Minister’s Employment Generation Programme (PMEGP). Credit Guarantee Scheme provides guarantee cover for collateral free loans upto Rs.100 lakh. Micro and Small Enterprises-Cluster Development Programme aims at holistic development of Micro and Small Enterprises in clusters through soft interventions, hard interventions (setting up of Common Facility Centres) and infrastructure upgradation. 

This information was given by the Minister of State, Micro, Small and Medium Enterprises, Shri Giriraj Singh in a written reply to a question in Lok Sabha here today. 

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Promotion of Khadi 

Khadi and Village Industries Commission has been re-established vide Notification No.A-43013/6/2015-KVI-P dated 26th October 2015 with an objective to promote, facilitate and assist in establishment and development of Khadi and Village Industries in rural areas.

Khadi is already an international brand.  KVIC has been granted Deemed Export Promotion Council status since December 2006.  1018 Khadi and Village Industries (KVI) Institutions are registered as members.  However, most of the exports are through merchant exporters and not directly by KVI units.  5% of the Free On Board (FOB) value or Rs.10 lakh, whichever is less, is provided as incentive for KVI units which undertake Direct Exports.  In addition, KVIC encourages Khadi, Village Industries to participate in International Trade Fair/ Exhibitions by subsidizing 75% of the Air fare and 50% of stall rent to augment export of their products in general subject to maximum limit of Rs.1.25 lakh each.  In case of Women entrepreneurs & institutions/ST/SC/NE States, air fare and stall rent extended to the extent of 100% subject to maximum limit of Rs.1.25 lakh each.  Government in the Ministry of Micro Small & Medium Enterprises is implementing a number of schemes for the holistic development and promotion of khadi which include:

(i)                  Strengthening of Infrastructure of existing Weak Khadi Institutions and Assistance for Marketing Infrastructure provides for renovation of khadi sales outlets and providing assistance for strengthening of infrastructure. 

(ii)                Market Promotion and Development Assistance under which assistance is provided @ 30% of prime cost of cost to be shared among artisans, producing and selling institutions in the ratio of 40:20:40.

(iii)              Interest Subsidy Eligibility Certification scheme for providing bank loans for khadi and polyvastra at 4% rate of interest.

(iv)              Workshed Scheme for khadi artisans for providing assistance for construction of worksheds.

(v)                Scheme of Fund for Regeneration of Traditional Industries (SFURTI) under which assistance for replacement of obsolete equipments, setting up common facility centres, product development, market promotion and other support is provided in clusters of traditional industries including khadi industries.  Under the scheme 71 such clusters are to be set up during XII Plan period.  26 clusters have been given final approval for establishment so far.

(vi)              Khadi Reforms and Development Programme (KRDP) to revitalize the khadi sector with enhanced sustainability of khadi, increased incomes and employment for spinners and weavers, increased artisans welfare and to achieve synergy with village industries is being implemented.

The State/UT wise details of 11.27 lakh workers are given is:

Number of Khadi workers State/UTwise

Sl.No.
State
No. of workers
1
Jammu & Kashmir
0.25
2
Himachal Pradesh
0.08
3
Punjab
0.45
4
UT Chandigarh
0
5
Haryana
0.52
6
Delhi
0.04
7
Rajasthan 
0.86
8
Uttarakhand
0.41
9
Uttar Pradesh     
4.17
10
Chhattisgarh
0.08
11
Madhya Pradesh
0.07
12
North-East
(Assam-15956; Arunachal-87; Nagaland-2051; Manipur-370; Mizoram-0; Tripura-445; Meghalaya-91)
 0.19
13
Bihar
1.1
14
West Bengal
1.06
15
Jharkhand
0.04
16
Odisha
0.04
17
Gujarat
0.4
18
Maharashtra
0.03
19
Goa
0
20
Andhra Pradesh / Telangana
0.33
21
Karnataka
0.41
22
Kerala
0.19
23
Tamil Nadu
0.55
24
Pondicherry
0
Grand Total
11.27

Market Promotion and Development Assistance aims to increase the earnings of Khadi workers.  Under the scheme khadi artisans will be given market development assistance at 30% of prime cost to be shared among artisans, producing and selling institutions in the ratio of 40:20:40. The share of the artisan is enhanced from earlier 25% to 40%. This benefit will be transferred directly in the accounts of the khadi artisans.

KVIC is taking various steps to promote khadi by tying up with e-commerce portals, big malls etc. to promote khadi and increase its sale.  It is making and selling new designer ready to wear clothes focused on youth like Khadi Denim, Khadi T-shirts.  Trade Fairs/Exhibitions are being organized at District/State/ National level for promotion of Khadi.


This information was given by the Minister of State, Micro, Small and Medium Enterprises, Shri Giriraj Singh in a written reply to a question in Lok Sabha here today.

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