The ministry of micro, small and medium enterprises has proposed to set up a fund for technology acquisition and support to assist the indigenous technology and acquisition of global technology by the India MSMEs. To this effect, A Technology Development Fund of Rs.10,000 crore is proposed for supporting MSMEs to undertake technology upgradation, acquisition, adaptation and innovation to enable them to move up the value chain.
The ministry also proposes to refine the current FDI policy in vogue to bring up capacity, capability and technology development of the SMEs. In respect of all large projects involving FDI, ancillary development should be made a condition, as per the recommendations of the report.
According to the proposal, the Working Group suggested that MSME sector is the major base of manufacturing sector in India, with its contribution of over 45 per cent in the overall industrial output. On the other hand, 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. Thus this goal will require substantial enhancement of the growth rate of MSME sector during the 12th Plan from the current growth rate of 12-13%.
Setting up of a fund for Technology Acquisition and Support is line with the recommendation of the Prime Minister’s Task Force on MSME sector. The key areas covered under technology development and acquisition are Information technology (ICT) adoption in MSME business processes, Bio Tech product groups, use of Nano tech in developing products / components, and use of Clean tech / Renewable energy based products and processes.
Towards this endeavor, it is also proposed to lift the ban on setting up of new institutions and more number of product specific technology centers (e.g., toys) should be set up in different parts of the country for effectively facing the challenges posed by imported goods, as per the report.
Another important measure suggested by the working group to widen the market for technology based MSME activities is to set up a mechanism in the Defense Ministry to ensure that the offsets under Defense purchases are suitably focused to support the small and medium enterprises in upgrading their capacities, capabilities and technology. Further, the Offset Policy for other departments under consideration, such as Railways, should also give priority for passing on the benefits under the off-set policies to the small and medium enterprises in the country.