Currently Medium, Small and Micro Industries (MSME) contributes 8 per cent to India’s GDP. R&M highlights measures that can hike the contribution 15 per cent by the year 2020.
1. Make in India
There is a need to develop an environment which will not only help increase domestic production but also a healthy place so that multinational companies can come and invest in several sectors to meet domestic demand as well as to enhance exports.
2. Skilling India
The growth of MSME will require a huge skilled workforce. Thus, the country needs to give special focus on skill development programmes. For this, the youths of the country should be skilled to ensure the programmes a success.
3. Catering to ICT Sector
As the Government focuses on Digital India programme, MSMEs manufacturing electronics and providing services to the ICT sector in line with the government vision can boost growth.
4. Enhance Export
High export contribution by MSME can be attained by making a globally competitive environment, adopting advanced R&D, encouraging innovation and incorporation of technologies. Providing MSMEs with global market access through bilateral trade agreements can also improve the sector.
5. Promoting procurement across industry
Encouraging an environment, creating incentives for investments and supporting efforts by big corporate houses in vendor development for MSME segment particularly adapting to research and development, innovation and global technologies will be a facelift for the sector.
6. Boosting traditional and heritage industries
Increasing incentives and supporting stakeholders that invest in development, growth and opening global markets for India’s traditional and heritage industries for goods, services and agricultural and natural medicines and therapy related products and services will boost traditional and heritage industries in the country.
7. Developing industry clusters
The is a need to develop national, regional and sector specific clusters and business centres for MSME in public–private partnership model for state-of-the-art infrastructure comprising physical infra, knowledge infra, e-platforms, business-to-business access and technology and innovation support for MSME.
8. Bringing regulatory reforms
One ‘all India all-purpose’ enactment as MSME regulation to be adopted by all stakeholders in MSME sector with one window and one annual return compliance coupled with significant direct tax incentives and indirect tax exemptions.
9. Funding infra
Open environment and incentives for investments by HNWI (high-net-worth individual) and funds into MSME business as well incentivising debt funding in MSME segment can write the growth story of the sector.
(With inputs from CII-KPMG MSME Report, October 2014.)