core sector communique

12th Plan Vision for MSME Growth

The MSME sector of India is today at the gateway of global growth on the strength of competitive and quality product range. The Report of the Working Group on Micro, Small & Medium Enterprises (MSMEs) Growth for 12th Five Year Plan (2012-2017) feels facilitation from the Government is required to minimize transaction costs of technology upgradation, market penetration, modernization of infrastructure etc. The Report says “The PM’s Task Force has already taken significant initiatives in this regards. The recommendations of this Working Group for the 12th Plan period will be vital enabler towards implementation of the initiatives of the Task Force through participative, transparent and scalable policies and schemes of the Government of India”. A framework for the report of the Working Group was developed In the first meeting of the Group and 11 Sub-Groups were constituted for detailed study of important focal areas to identify the bottlenecks and suggest facilitation needed to overcome them. In its second meeting the Working Group decided to give the recommendations on following thematic verticals: • Finance, including credit. • Infrastructure. • Technology. • Marketing & Procurement. • Skill Development & Training. • Institutional Structure The Working Group has recommended a road map for projecting Khadi as well Village Industries as pure, ethnic and environment friendly products in the global market. Similarly, Coir sector has an enormous growth potential. This wonder fibred could be converted into high value products like geo- textiles and other green products. The recommendation of the Working Group is to promote value added coir products with required funding by the Government. The Group recommends retaining unique status of both the sectors and proposes separate allocation for them. The Approach Paper of the Planning Commission for the 12th Plan period mentions MSME Sector as the foundation for the overall manufacturing sector. Nurturing competitive MSMEs would help in absorbing new technologies and improving productivity in manufacturing sector, with stimulation of the growth of dynamic clusters as a key to such an approach. The Approach Paper also stresses on need for skilled human resources for competitive enterprises and linking Skill Development and training initiatives with industry requirements. It also stresses the importance of penetration of information and communication technology, which can enhance the overall competitiveness of the sector as well as the quality of governance. Further, it also recognizes the important role of innovation in spurring growth and unleashing potential of enterprises. Thrust on frugal innovation will result in generation of affordable and accessible products and services of global standards. The National Manufacturing Policy envisages increasing the sectoral share of Manufacturing in GDP to 25 % over the next decade and generating additional 100 million jobs in manufacturing sector through an annual average growth rate of 12-14 % in manufacturing sector. MSME sector is the major base of manufacturing sector in India with its contribution of over 45% in overall industrial output. To achieve the ambitious targets of National Manufacturing Policy, the Working Group on MSME Growth looks forward to enhance the growth rate of the MSME sector substantially from the existing level of 12 - 13 % growth rate per annum. Planning Commission constituted the present Working Group on Micro, Small & Medium Enterprises (MSMEs) Growth for the 12 th Five Year Plan (2012-17), under the chairmanship of Secretary (MSME) with 46 members representing various Ministries/Offices of Government of India, representatives of selected State Governments and Industry Associations, NGOs etc. in May, 2011. The terms of reference of the Group was, carrying forward the recommendations of the Prime Minister’s Task Force and suggest specific action plan and milestones to be achieved within the 12 th Plan period. Further, the terms of reference of the Group also includes suggestions to address problems of Un-organized Sector and formulate proposals/schemes to facilitate overall growth of the MSME sector. To identify issues inhibiting growth of the sector, a Task Force was constituted by the Prime Minister in 2009. The Task Force made 85 recommendations to unshackle the Indian MSMEs.