Namrata Kath Hazarika | 09 Nov, 2012
of Micro, Small and Medium Enterprises is scrutinizing the MSME schemes in order to
take a decision which of them are to be continued during the 12th
Five Year Plan period, said MSME Secretary Vivek Rae to SME Times in New Delhi
"Since the 11th five year plan has come to an end and
the 12th five year plan is starting, we usually review all our schemes
and see which are the schemes which are doing well, for which the demand is
there and for which we are able to spend money. And, wherever there is a need
for cost correction, we make the cost correction. So, we are doing this
exercise now," he said on the sidelines of an event in the national capital.
He said the ministry will continue with the schemes which are quite popular
among SMEs in the 12th plan. There are more than ten schemes in the 12th five
year plan, which the ministry is focusing on at present.
"First, we will concentrate on our ongoing schemes and then we will think
of the new schemes. Some new schemes are under consideration as well. They are
yet to be approved. The National Development Council (NDC) will meet soon. Only
after that we will know what will be the final initiative," he mentioned.
He pointed out that schemes like Lean manufacturing, Performance and Credit
Rating Schemes, TUF schemes for textiles including many more are having good
impact on SMEs and are well-utilized. So, these schemes will continue in the
12th five year plan as well.
The Ministry is waiting for NDC to finalize the fund required for the sector in
the 12th plan and after that they will plan the schemes accordingly. These
funds will be available in a month or two.
Further, Rae also added, "...most of the schemes are doing well and since
our budget is limited, we should be allocating our resources for most of
schemes which are doing very well and may be less for the schemes
which are not very well. Otherwise, if we spend our resources very thinly
then we do not get the impact that we want. There are ten of the major
schemes which take much of the resources then the impact will be much
The Secretary also indicated that they may or may not
continue with the schemes which are not doing well among SMEs in course of
Also, the ministry has plan to come up with 10 more tool rooms in the
12th plan from the existing 10 at the moment. These tool rooms helps in
training and provide invaluable technological support to the industry.
In addition, according to the study that was released at the FICCI event by the
MSME Secretary surveyed 2257 firms, spread in 16 cities across all over India,
representing both the manufacturing and service sectors reveals that 52 percent
of the surveyed SMEs are not registered with the MSME Act. It said 49 per cent
of the businessmen in micro, small and medium segments are of the firm view
that India's tax structure is proving a big stumbling block to business growth.
Inflation is also perceived to be another obstruction to growth of the Indian
economy by 41 per cent of the respondents.
Finding also said that 49 per cent of the surveyed firms feel that rolling out
GST can reduce the negative effects other schemes have on business growth
prospects. Exchange rate volatility is seen as another barrier to business
prospects, especially in SME segment, by 33 per cent respondents whereas 36 per
cent respondents feel that the impact of technological bottlenecks to business
growth is moderate.
Only 36% of firms could avail financial assistance from banks due to strict
procedural norms, lengthy documentation and high interest rates, the study