'Inter-ministerial committee to focus on MSME exports'

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Namrata Kath Hazarika | 08 Apr, 2013
The government is working out on a "New Mission" to boost manufacturing exports from the Micro, Small and Medium Enterprises (MSMEs) in the country that has witnessed decline in the percentage of growth to country's overall exports.

For this purpose, an Inter-Ministerial Committee (IMC) has been decided to be set up by the Cabinet Secretary, Ajit Seth recently so that the panel can address the issues of Micro, Small and Medium Enterprise (MSME) sector and suggest ways that can boost exports from the sector.

Speaking to SME Times, the MSME Secretary, Madhav Lal said, "We have noticed that the exports have not been doing too well i.e., the manufacturing exports have not been doing so well. And, MSMEs constitute a major part of the exports."

"The inter-ministerial committee was the fall out of a meeting which the Cabinet Secretary has taken in connection with the foreign trade issues i.e., the exports," he added.

"In the meeting, it was felt that some of the issues need to be looked into greater depth," he said.

The committee will be headed by Saurabh Chandra, Secretary, Department of Industrial Policy and Promotion (DIPP). Also, Ministry of Textile, Ministry of Labour, Ministry of Food Processing and other few ministries will be part of inter-ministerial committee including MSME Ministry itself.

At present, the share of MSME exports has fallen from 40 percent to 36 percent to the country’s total export growth.

Moreover, MSME Ministry has already submitted their proposal to the Ministry of Commerce and Industry to look in to the issues of credit availability especially to the sector in the forthcoming Foreign Trade Policy (FTP) that is scheduled to be announced on April 18.

"We have made certain recommendations relating to credit availability, timely credit, terms of credit for MSMEs and its different verticals. We have recommended for creation of more geographically spaced warehousing facility for exporters not only in our country but abroad," Lal told SME Times.

"We also said that we are focusing on certain sectors like gems and jewellery, apparel, etc. We should look at global opportunity to diversify and give special incentives for some other sectors like pharmaceuticals, chemicals, etc.," he added.

The MSME Secretary expressed that this is just a part of the total agenda at the moment to boost MSME exports from the country but the Ministry is exercising strategies in more detail which won't be possible for them to submit to the Commerce Ministry before the FTP review. "More detailed exercise covering the short term and medium term measures that MSMEs could take with handholding and other support from the government will be incorporated in our reports. This is under the inter-ministerial committee. But it may not be possible for that committee to give report and its recommendations to be incorporated as early as April 18 when the Ministry of Commerce is planning to come out with a supplement," Lal added.

So, it is likely that the ministry will come up with some special incentives for the sector later on, he added.

At the moment, the sector accounts for around 45 percent of the manufacturing output and providing employment to about 60 million persons through 26 million enterprises.