Assocham stresses on enhancing capacity of MSMEs in MP

Wants committee headed by Minister of Commerce and Industry to draft policy

Associated Chambers of Commerce (Assocham) on Wednesday demanded an urgent intervention from government to propel growth in micro, small and medium enterprises (MSME ) sector in Madhya Pradesh.

Though state industry minister Kailash Vijayvergiya and a platoon of officials assured the chamber that all appropriate support would come at doorsteps, members of the sector felt that in absence of a proper policy the sector, which generates most direct jobs, is the worst sufferer.

"They just talk about sops and freebies than why MSME is yet not performing up to the expectations," said an office bearer of Mandideep Industries Association. Assocham demanded a high-power committee headed by Minister of Commerce and Industry to draft an effective policy to accelerate growth and development process of micro, small and medium scale industries operating in the state.

In its study titled 'Madhya Pradesh- Enhancing Capacity for Sustainable Growth,' presented to the state industry minister Assocham said, "There is an urgent need to evolve an effective strategy comprising various significant aspects like marketing, working capital management, technological upgradation, inter-linkage amid MSMEs, cluster development, skill development, facilitating micro credit, financial inclusion and revival of sick industrial units in wake of rising land prices."

Assocham released its study to mark its '8th SMEs convention on Enhancing Capacity for Sustainable Growth,' in Bhopal today.

The study pointed out that MSME sector accounts for about 45 per cent of India's total manufacturing output, about 40 per cent of India's total exports, thereby employing over 70 million people in over 30 million units spread across the country manufacturing over six thousand products ranging from traditional to high-tech items.

Assocham drew attention of the government on rising input cost of manufacturing, lack of availability of adequate and timely credit, limited access to equity capital, problems relating to storage, designing, packaging and product display, lack of access to global markets and modern technology, inadequate basic infrastructure facilities, dearth of manpower, multiplicity of labour laws and others are certain key challenges faced by the MSME sector.

Suggesting a road-map to promote and develop marginal, small and medium enterprises (MSMEs) in Madhya Pradesh (MP), the ASSOCHAM study has recommended for adopting a consortium approach to solve the marketing related problems of the MSME sector.

The study has also suggested to periodically reviewing the activities of ensuring effective financial arrangements for the MSMEs.

The minister however assured that his government would focus more on industry needs.

"We are focusing on food processing, warehousing and skill development. Our focus mainly covers rural areas where real potential lies," Kailash Vijayavergiya said while responding to the Assocham demand that technology upgradation is significant area which requires immense government attention to promote growth and development of MSME sector in MP.

With a view to supporting MSME sector, state government would arrange additional funds for the sector for market linkage and exposure. "If industrialists in the MSME sector want financial assistance in marketing links, we will provide additional funds," P K Dash, additional chief secretary of the department of industries said.

The Assocham however suggested there is scope to develop the entrepreneurial culture and further improved through specialised training, technical assistance and general consultancy services through professional institutions.

"A cluster development approach should be implemented to ensure sustainable growth of industries and this requires major initiatives to develop ancillaries and voluntary organizations to provide necessary linkages," the chamber suggested.

Considering there is a gap between demand and supply of micro credit, Assocham suggested that state government together with leading microfinance companies, non-governmental organizations (NGOs), self-help groups (SHGs) and others should come forward and provide cheaper loans to micro-entrepreneurs.