Interview with Kalraj Mishra

Biz@India

January 2016

EU Essential for MSME Growth

KALRAJ MISHRA, Union Minister of Micro, Small and Medium Enterprises, India

With the government working on challenges such as the credit guarantee that counter its growth; the micro, small and medium enterprises (MSMEs) may be the lifeline of economic development of India, says Kalraj Mishra.

What is the role of French and other European countries and companies in the growth of MSMEs of India?

European countries and companies play essential role in the growth of Micro Small and the Medium Enterprises (MSME) sector of emerging countries like India. Given the geographical diversity of India and its high reliance on agriculture, MSMEs are the lifeline of economic development and growth in future. India has sought Europe to be a better destination for SMEs. In the last few years, as per the finding of the report of inter-ministerial committee for boosting sports from MSME sector, the share of Indian sports to Europe was 80.7 pc from April to November 2012-13. The contribution of European countries and companies in the growth of MSME sector has been growing over the years.

What are the challenges faced by European businesses in the Indian market?

One of the prime challenges faced by European businesses in the Indian market is the lack of awareness here. Although there are numerous challenges, but we are trying to work them out through ministry’s approach towards ease of doing business in India. I am confident that we will solve the challenges also.

How is the government ensuring the access of Indian MSMEs to bank finance?

Credit guarantee is the primary challenge that we face. MSME has already created the credit guarantee trust fund to overcome the challenges that arise before the entrepreneurs. The credit guarantee trust fund this time is more than EUR 12 billlion and the second largest guarantee fund after the US. The credit guarantee fund puts off the concerns of monetary challenges faced by entrepreneurs. We are also trying to encourage entrepreneurs and assure them of the financial security. However, entrepreneurs face difficulties because of the bank. We have already defined for the MSMEs that collateral free loan should be given to entrepreneur but difficulties are arising in this direction.

When was the Credit Guarantee Fund Trust Fund created, and how much has already been used?

We are trying to encourage the state government as industry is really a state subject and centre and state should work in coordination. With the support of the state, we can push and encourage the entrepreneurs to grow. The credit guarantee fund should come from the state side also.

What is being done to encourage MSMEs?

We encourage innovative people who have technical knowledge through which they are trying to invent and introduce novelty to the industry. We support such entrepreneurs in all our capacity. We have innovation fund of EUR 27 million in MSME sector.

What about skill development?

PM launched Skill India campaign and has been actively involved in it. The skills of common man should be channelised through this medium. The confidence of common man about his skills would boost him to grow. Therefore, we are going to open numerous skill development institutions. The creation of ministry of skill development and entrepreneurship is a big step towards this direction. With establishment of skill development institutions in the country, the industries should not lack in work force. With this process ‘Make in India’ will be significant not only in the country but in the world.

How do you ensure that adequate trained manpower is available?

We have a target to skill 1.5 million people and we are confident on achieving this target. In future, the number will rise as we have three types of skill development. The first one is livelihood skill development, which is called the vocational training incubation centres. We take admissions of class 10 and above qualified people and through these technical incubation centres we train them. After that they may go for small scale industries or may even think of being the entrepreneurs themselves. The second is for both unemployed youth and entrepreneurs to get trained together. After the training entrepreneur may choose the unemployed youth who have been trained there. Entrepreneur may also think about their industrial development and qualitative production. There are three institutions – NIESBUD (National Institute for Entrepreneurship and Small Business Development), Noida; IIE (Indian Institute of Entrepreneurship), Guwahati; and MSME Development Institute, Hyderabad. Through these institutions we also train women and SC/ST (underprivileged sections) entrepreneurs. The third is for the technology training through the ‘tools room.’ There are 18 tools rooms while 15 more are to be constructed.

What about traditional skills? Is anything being done for artisans?

Such skills come under the cottage industry. Through considerable development, the upgradation of machines should be there. We have provided funds and subsidies for machine and technological upgradation. The cottage industry will be revived and we are moving in a positive direction.