New umbrella association of MSMEs in the works

The move is expected to facilitate more fruitful interaction with the government

The ministry of micro, small and medium enterprises (MSME) is planning to bring all MSMEs under one umbrella association. The move will help the government to interact with the sector in a much more efficient manner, said a senior industry representative.

Rafeeque Ahmed, chairman, Ficci Tamil Nadu State Council, said the process (of forming the apex association) has already started. The MSME ministry has already held three meetings in the last three months.

Unlike other sectors, the number of associations representing the country’s MSME sector runs into hundreds. “If the ministry calls for a meeting to discuss an issue related to the industry, a minimum of 500 people come to attend the meeting. Everybody expresses their own views,” said Ahmed, who has attended several such meetings.

The ministry wants to have one association to represent the MSME sector, and in turn the association will be the authoritative voice of the sector. To start with, eight to 10 associations are likely to be merged to form the association, Ahmed said.

At present, not only does each industry in the MSME sector have an association, but associations are sometimes even specific to a particular cluster or industrial estate.

The MSME sector is one of the main pillars of the country’s economy. Based on gross domestic product (GDP) data published by the Central Statistical Office, Ministry of Statistics and Programme Implementation (MoSPI), the contribution of micro and small enterprises (MSEs) to GDP and total industrial production was estimated to be 8.72 per cent and 44.86 per cent respectively in 2008-09.

The estimated contribution of MSMEs to India’s total exports in 2007-08 (the latest year for which data is available), based on data obtained from the Export Promotion Councils, was 30.8 per cent.

Enterprise-wise data on MSMEs collected during the Fourth All India Census of MSMEs 2006-07 and Economic Census 2005, indicate that out of 36.18 million MSMEs, entrepreneurs belonging to Other Backward Classes owned 15.17 million MSMEs (41.94 per cent), while entrepreneurs belonging to the Scheduled Castes and Scheduled Tribes owned 2.83 million (7.83 per cent) and 2.08 million (5.76 per cent) MSMEs respectively.

The socially backward classes of society together owned 20.09 million MSMEs (51.54 per cent), while women entrepreneurs owned 3.85 million MSMEs (10.64 per cent). The above data suggests that MSMEs help in achieving inclusive growth.