Like roti, kapda aur makaan, the industry needs finance, power and water. Plugging some of these gaps can boost the sector, thereby giving a fillip to the overall campaign.
The focus of Make in India is on creating jobs and skill enhancement in 25 sectors. The basic object is to create jobs in the unskilled category and make them skilled workers. Employment generation can happen from the micro, small and medium enterprises (MSME) sector and MSME units by manufacturing goods for both Indian and foreign investors and companies. The basic object is to manufacture in India and to export. There are two advantages of this - generation of employment and earning of foreign exchange. MSME is the backbone of the Indian economy and playing a vital role in providing employment, next only to agriculture.
Having a major share in exports of nearly 45 per cent of the total exports of the country, I think the aim of Make in India can be fulfilled by the MSME sector only. Only thing, the government has to support the sector by providing the various facilities required for creating and manufacturing the goods for foreign countries. This includes upgrading technologies, where the government has to provide the knowledge to educate unskilled workers to produce as per the requirements of the foreign buyer. To this end, the campaign seems to be moving in the right direction. However, I also feel that to succeed with the objectives of its campaign, the government needs to educate and create capacity building programmes. It is important to do these activities in order to create awareness about the campaign to the MSME sector. True, there has been a nationwide launch but the awareness is still very much lacking among a large chunk of people in this sector. The MSME ministry needs to step in here. There are various schemes for the sector for which the government should give a package for creating their units with zero defects.
The good thing is there has been a noticeable change over the last one year under the new Prime Minister. During the tenure of the previous government, the MSME Ministry saw five different ministers and secretaries. Thankfully, this ministry is finally on the right track. While the schemes were always there, the implementation suffered. This has been addressed to a good extent.
Specific to the campaign, MSMEs and small entrepreneurs are manufacturing with whatever they have available with them now. Technical support and know-how is required for manufacturing processes, engineering tools and equipment to help maintain appropriate levels of quality for foreign buyers. This must be provided by the MSME ministry as it is not reasonable for the sector to rely on their buyers for guidance. There has to be a twin approach and the Skill India campaign is an important component in that it can provide the technical know- how to a vast majority of unskilled workers in this sector.
The basic intention of the campaign is to make India a manufacturing hub. China is the manufacturing hub of the world right now. Our Prime Minister wants to set up manufacturing units in India to generate employment and foreign exchange. If this succeeds, I am very sure that within five years, the unemployment problem will be solved and the country will also earn foreign exchange. However, just like how human beings need roti, kapda aur makaan, the industry, too, requires finance, power and water.
This is the main material for the industry. To provide finance to both SMEs and MSMEs is fundamental, and it has to be provided timely. If it is not provided in time, then units becomes sick. For their survival and for all those who have enrolled in the Make in India campaign, they have to receive priority for financing. Power should be reasonably priced and of good quality. Water should also be provided as per requirements and again, at reasonable costs. All this is necessary if we want to become competitive.
Today, about 30-35 per cent of MSMEs could be sick units. We have suggested something similar like the Board for Industrial and Financial Reconstruction (BIFR) should be there for the MSME sector to ensure their revival. When the corporate sector goes into BIFR, they are exempted from statutory payments whereas in MSME sector, they are not exempted.
Also, under the Delayed Payments Act, those corporates who are buying from the MSME sector have to pay the MSME units within 45 days. This exists on paper only as it is not strictly monitored. We have suggested it should be treated as statutory payments, and if they are not paying, then the balance payable to the MSME sector should be added back to his income. Currently, it looks like MSMEs are financiers of the corporate sector. They are using the MSMEs payable amount as their working capital. Moreover, as we invite foreign manufacturers to come and Make in India, we must ensure a level playing field for the MSME sector as well. As we provide the red carpet treatment to foreign manufacturers, similar treatment should also be given to Indian MSME sector for their survival.
The cluster development programme of the Ministry is also something that will boost the Make in India campaign. In summation, we are moving steadily but surely along.
The author is Dr Avinash Dalal (Nallawala), National President, All India Micro, Small & Medium Enterprises Association (AIMA MSME) and Hon. Member, National Board MSME, (Ministry of MSME).