MSMEs in UP optimistic

MSME chamber IIA is holding a meeting in Greater Noida on May 29 to finalise a memorandum for the new dispensation, seeking incentives for the sector

The micro, small and medium enterprise (MSME) sector in Uttar Pradesh is optimistic of better days under Narendra Modi, who led his party to victory in the recent Lok Sabha polls.

MSME chamber Indian Industries Association (IIA) is holding a meeting in Greater Noida on May 29 to finalise a memorandum for the new dispensation, seeking incentives for the sector. The meeting will be attended by representatives of all its national chapters.

"The memorandum will talk about issues such as labour, taxation, red-tape, bank credit, etc," IIA office bearer and media coordination cell chief Prasshant Bhatiya told Business Standard.

UP has three million MSMEs, spanning both services and manufacturing. They contribute 50 per cent and 60 per cent to the Gross State Domestic Product (GSDP) and industrial output respectively, while supporting the livelihoods of 40 million persons. Together, they account for 12 per cent of India's MSMEs.

Bhatiya said IIA would seek an appointment with Modi and the concerned minister to apprise them of their challenges. Since Modi has been elected from Varanasi, which is a major MSME hub in the region, the industry is confident about the revival of their fortunes.

The MSME sector is facing multiple problems of power shortage to run units, high taxation, procedural delays, red-tape, lack of infrastructure, and working capital issues in UP.

Besides, the poor law and order situation and a perceptible lack of priority for industry in the present UP dispensation hasn't helped either.

There has been flight of industry from UP to other states to avail of incentives.

IIA wants MSME incentives on a par with agriculture, besides increasing the budget outlay for the sector. Industry laments that the sector has failed to garner attention despite providing employment to 140 million and contributing to the socioeconomic development of India.

The main industries in UP are information technology, textile, cement, vegetable oils, sugar, cotton yarn, jute, carpet, brassware, leather, paper, sports goods, auto ancillaries and glassware.

The key MSME enclaves include Varanasi, Allahabad, Moradabad, Saharanpur, Lucknow, Kanpur, Agra, Ferozabad, Meerut, Bhadohi, Ghaziabad, Noida, Bareilly, Gorakhpur, Khurja, Aligarh and Mathura. These are product-specific hubs. For example, Varanasi is famous for banarsi saris, Agra and Kanpur for leather, Bhadohi for carpets, Moradabad for brassware, Lucknow for chikan and Aligarh for locks.