Govt sets up committee to push exports from MSME sector

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SME Times News Bureau | 29 Apr, 2013
Worried over sinking contribution of Micro, Small and Medium Enterprises (MSME) sectors in overall exports he government has set up a six-member inter-ministerial committee under the chairmanship of Finance Secretary, R. S. Gujral that will suggest measures to boost MSME exports, reports media Sunday.

The Micro, Small and Medium Enterprises (MSME) sector was hit hard by the global economic slowdown and so its contribution to overall exports has declined to 36 percent from 40 percent earlier. The MSME sector contributes around 9 percent of GDP and accounts for around 45 percent of the manufacturing output.

"The committee will suggest short and long term measures to enhance exports from MSME sector. It will submit its recommendations by mid-May," an official said.

The official said there is an urgent need to look at the MSME sector as exports is not doing well due to which the country's trade deficit has touched an all-time high of USD 190.1 billion in 2012-13.

Although the government is taking every step including recent announcement of incentives and revamping special economic zone (SEZ) policy in order to increase shipments from the country, "more needs to be done", the official added.

Also India's exports declined by about 2 percent to USD 300.5 billion in 2012-13, way below the USD 360 billion targeted at the beginning of the year, due to the global demand slowdown.

The widening trade gap is adding woes on the Current Account Deficit (CAD) front, which has emerged as a tough policy challenge for the government. CAD crossed 6.7 percent of the GDP in the third quarter of last fiscal.

"Issues related with MSMEs need to be looked into greater depth as the sector would also help in boosting the growth of manufacturing sector," the official added.

The other members of the committee include Commerce Secretary S R Rao, Revenue Secretary Sumit Bose, MSME Secretary Madhav Lal, Financial Services Secretary Rajiv Takru and Chief Economic Adviser Raghuram Rajan.