UP funneled Rs 13,000 cr to MSMEs during 11th Plan

Sector that contributes 60% to state's annual industrial output employs 9.2 mn people and generates economic activity worth Rs 1,20,000 cr annually

The Micro, Small and Medium Enterprises (MSME) sector in Uttar Pradesh attracted investment worth nearly Rs 13,000 crore during the 11th Five Year Plan (2007-12).

The sector, which contributes 60% to the state's annual industrial output, employs 9.2 million people and generates economic activity worth Rs 1,20,000 crore annually.

Currently, UP is home to about 4.4 million MSMEs, including 4.2 million unregistered entities.

The state government thrust upon industrial development has resulted in establishing about 1,66,000 MSMEs at an investment of over Rs 13,000 crore and generating 8,50,000 lakh employment opportunities during the 11th Plan, Associated Chambers of Commerce and Industry of India (Assocham) has said in a study titled 'MSME sector in Uttar Pradesh' jointly conducted with Thought Arbitrage Research Institute (TARI).

"UP has made significant progress in promoting the growth of MSMEs through a conducive environment and policy support to enable the sector achieve higher levels of production, exports and employment," Assocham secretary general D S Rawat said while releasing the study with TARI Director Kaushik Dutta here today.

The implementation of Infrastructure and Industrial Investment Policy 2012 by the incumbent Akhilesh Yadav government (2012-Present) has led to establishment of more than 45,000 MSMEs with an investment of over Rs 3,000 crore and fresh employment to half million people during 2013-14.

However, there had been fall in MSME investments since 2012-13 due to macro-economic slowdown and a shift from manufacturing to services sector, which requires lower investment.

Repairing and servicing industries accounted for 1/4th share in key MSME industries in UP followed by miscellaneous manufacturing (15%), food products (15%), hosiery and garments (11%).

Western UP accounted for 50% share in region-wise composition of MSMEs, followed by eastern UP (28%), central UP (16%) and Bundelkhand (6%).

Meanwhile, Assocham has urged UP to revive 84,000 sick MSME units in the state as the sector formed the backbone of economic progress and development.

Shortage of working capital, lack of technological support, internal structural issues, heavy interest burden, obsolete plant and machinery, resource crunch, dearth of manpower and key challenges before the MSMEs in UP.

The government should involve industry players, academic institutes and field experts to assist sick MSMEs in reviving their businesses, which would also lead to utilisation of assets and capacity already created, suggested the study.