India will become a manufacturing hub only after encouraging MSME: Kalraj Mishra

Interview: Kalraj Mishra, union minister, MSME

sweta-ranjan

Sweta Ranjan | September 4, 2015


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With the NDA government’s focus on skill development, job creation and small-scale industry, union minister Kalraj Mishra has a tough task cut out for him. In an interview to Sweta Ranjan, he talks about the challenges and opportunities before his ministry.

India is struggling to get rid of unemployment but creating jobs is a challenge. According to estimates, there is a requirement of 12 lakh jobs a month. How does your ministry plan to tackle this?

This challenge is being seen by our ministry with a lot of seriousness. We are facing this as a big problem and we are confident that with the means of this ministry, the problem can be resolved. We are drawing up schemes, plans and projects accordingly. Our focus is twin-fold: entrepreneurship and skill development. To create entrepreneurship and also to create an entrepreneur mindset so that more and more people become entrepreneurs. Second is to provide employment to the unemployed. We plan to develop both these schemes. Through the National Institute for Entrepreneurship and Small Business Development (NIESBUD) we have drafted schemes to train entrepreneurs and job seekers. We have started a web portal that also registers new enterprises. Till date 85 enterprises have been registered under this. The portal covers more than 16,000 youths. After registering themselves, a company can look for suitable candidates. On the other hand, a registered job seeker can look for jobs here. This process helps us know the skills of the youth and will play a role in dealing with unemployment.

The second way to tackle this issue is by encouraging youth to become entrepreneurs. For this we have started small training centres. We aim to set up 500 centres. Our nodal agency, National Small Industries Corporation (NSIC), has taken up this task. The ministry is also running incubation centres that will provide hands-on training. The cost of machines ranges from '3 lakh to '25 lakh. After receiving the training one can set up one’s own work and we can guide them in obtaining loans from banks. Computer repair, TV repair and mobile repair are some such options. We are also talking to small-scale industries to absorb these people trained by us. We are also inviting companies and agencies to organise job fairs. We organised one in Hyderabad at the National Institute of Micro, Small and Medium Enterprises, which was attended by around 10,000 people, out of which around 2,000 people got jobs. In Surat, at an engineering college I attended a fair. There were around 4,000 participants and visitors, including 85 companies. From that fair 830 people got jobs. Similar job fairs have been organised in eastern UP.

But this alone will not help us tackle the issue. The other important point I want to make is about the prime minister’s employment generation programme (PMEGP) through which every year about 50,000 projects are being cleared by us. This means so many people are taking loans for entrepreneurship and people are getting jobs. In one year one lakh jobs will be created through PMEGP. In the next two to three years more than three lakh people will be benefited. Our slogan is ‘Berozgar se lekar Swarozgar taq ki yatra’ (the journey from joblessness to self-dependence). Not merely a slogan, it is my commitment too. To complete this task, we will reach small villages through PMEGP and to provide training we have initiated a programme called RSETI (rural self-employment training institute), for which an NGO is looking after bank-related issues. It chairman is Dr Virendra Hegde. He has been honoured with Padma Vibhushan. We have requested him to organise trainings in all districts.


There is a great need of skill development in our country. How is your ministry contributing in this target?


The skill development ministry has made various announcements in this regard, but our ministry also has planned certain schemes. Our schemes are ‘zero defect, zero effect’ which means ‘doshmukt nirman’. Zero defect means environment friendly. For such kind of quality products we are working on the National Manufacturing Competitiveness Programme (NMCP). It has eight components. Through this scheme we will create quality products for which we are training people. It has various kinds of technology, including technological quality and tool centre systems. We have got World Bank assistance for BSc, MSc, MBA, BTech and MTech levels of skill development so that the youth develops a mentality of entrepreneurship. I am sure they will get placements at good places. We are working in this direction. Today, so many industries are being set up and they all want to procure latest technologies, for which they want skilled manpower. For this we have started a web portal for the digital employment scheme. Through the portal, we will know the requirements of a particular industry and if a youth feels the requirement matches his needs then they could negotiate. This was started a month ago and more than four lakh registrations have been done. We are also trying to give training through incubation centres for livelihood.


Are there any special schemes for women entrepreneurs?

Under the PMEGP, while the general percentage of subsidy is 15 percent in cities and 25 percent in villages, for women and SC/ST there is a subsidy of 25 percent in cities and 35 percent in villages. We are going to play a major role in the government’s ‘Make in India’ drive. We have action plans to provide collateral-free credit, creation of state verticals for extending guarantees to entrepreneurs of particular states with financial support from state governments, creation of verticals for women and youth among SC/ST and NE regions. Our aim is to create more and more rural and women entrepreneurs.


Khadi is our indigenous product. What initiatives are being taken by your ministry to promote and develop khadi?

Till date khadi was being run on ‘no profit, no loss’ basis. We decided to carve a place for khadi in the international market. We have started designing in a way that it is in a position to make profits. Khadi has been included in fashion designing. We have started denim khadi. We are ensuring a better life for khadi craftsmen. We have upgraded the charkha to ensure that the thread for khadi is of good quality. We are making continuous efforts to enhance and uplift the status of khadi. We are also making efforts to improve marketing. And all these things will happen when the quality of khadi is up to the mark. The inclination of the people towards khadi has improved to a great extent. The sale of khadi has increased by more than 80 percent.


Creating and promoting entrepreneurship is challenging but equally challenging is the task of revival and rehabilitation of sick units. How will you help them?

Under the ‘Ease of Doing Business’ we have started B2B and B2C (business-to-business and business-to-consumer) web portals. We have also started niesbudnaukri.com portal that helps a job seeker to find vacancies and also an employer to find the right worker. For sick units or the non-performing assets (NPA), we have the Revival and Rehabilitation of the Enterprises programme. If a unit is about to become an NPA, a committee is formed to draft a corrective action plan and determine if the company wants to become an NPA wilfully or has genuinely gone broke. If they wilfully want to become an NPA then they would be penalised and if the case is genuine then they will be guided and given chances of revival.


There is a notification released on the exit plans of enterprises...

Yes, we have come up with an exit plan. Companies that become NPAs will now have a smoother way to exit. Initially, a committee will do the study and work for the revival of the enterprise but if the enterprise just wants to exit, there will be an easy way.


What steps are being taken to promote technology?

In order to upgrade and expand the network of MSME technology centres (earlier known as tool rooms and technology development centres), a programme called Technology Centre Systems Programme (TCSP) is being implemented at an estimated cost of '2,200 crore, including World Bank funding of $200 million. The programme is in advance stages of implementation. Locations have been finalised in nine states for establishing new technology centres. It is expected that the provision of technology partners, cluster network managers and national portal as envisaged in the programme will promote the manufacturing sector, especially MSMEs, to a great extent. In addition, the programme will greatly improve employability of youth all over the country by skilling and up-skilling them suitably.


How is your ministry turning the visions of PM Narendra Modi into reality?

The prime minister has made the announcement that India will soon become a manufacturing hub. India will become a manufacturing hub only after encouraging and up-scaling MSMEs. PM Modi has been to many countries that have promised help and support to increase the number of MSME units. This whole process will become ‘Make in India’.


Innovation is one field where MSME needs to perform well. Do you think our MSMEs are doing well in this direction?

Indian MSMEs are gradually looking for global footprints and in doing so they are trying to be innovative. The ministry of MSME is setting up a dedicated fund – India Inclusive Innovation Fund – to promote grassroots innovations with social returns as well as modest economic returns. This fund will operate as a for-profit entity with a social investment focus. It would back enterprises developing innovative solutions primarily for citizens who are among 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 '500 crore and maximum '5,000 crore, with an initial contribution of the central government at '10,000 crore. The ministry has also taken steps to operationalise a '200-crore fund for the technology centre network, innovation, entrepreneurship and agro industry. We have also launched a scheme called ASPIRE for promotion of innovation, entrepreneurship and agro industry.

 
But collateral and poor access to finance act as hindrances in growth of the sector.

It is true that for micro units there is a collateral security fee of '1 crore, but banks have not been able to follow this seriously. So, MSME has ensured credit guarantee trust fund. We have said that in particular cases, MSME will take guarantee through the fund. The units which are performing well but may turn sick in future because of weak ratings will get subsidy through the NSIC. This way we are trying to save units. We are addressing high cost of loans by implementing the performance and credit rating scheme for micro and small enterprises (MSEs), which provides financial support to MSEs for getting rated and consequently obtain loans at concessionary rates of interest.


The demand for a monitoring panel is felt time and again. What are your views?

Monitoring is required every time. The MSME sector was never presented as an organised sector earlier, but now we are making efforts in that direction. The credit flow to MSME sector is already being monitored continuously and periodic reports are being made. The need of the hour is to devise an effective method of penalty and incentives so that commercial banks fall in line.


How beneficial has Mudra Bank been?


Mudra Bank is much more beneficial for the service sector with its limit of '50,000 to '10 lakh. The shopkeepers, cobblers, dhobis and other financially weaker sections of society will be able to earn benefits. Mudra Bank is mostly for OBC, SC/ST and the downtrodden. I believe this is the first time our government has paid so much attention to them and has presented a non-banking finance system. If this whole task is performed in an integrated way then we will be able to find a solution to the problem of generating 12 lakh jobs every month. I am fully confident we will.


The general perception is that the MSME sector is unorganised. How will this image change?

People felt that micro is an unorganised sector. People feel there are four crore units under the MSME but out of this big figure only 16 lakh units are registered. We have requested all members of the MSME board to run a campaign to get the unregistered units registered and people have accepted this.

sweta@governancenow.com

(The interview appears in the September 1-15, 2015 issue)

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