Newly appointed minister for micro, small and medium enterprises (MSME) K H Muniyappa on Wednesday announced that foreign direct investment (FDI) will be encouraged in MSME sector in order to attract more and more capital. However, he clarified that it will not be done at the cost of players in the MSME sector but by protecting their interests. "A detailed plan in this regard will be worked out. But I am in favour of FDI in the MSME sector which contributes 40% to the India's exports. FDI in general for the country as a whole is also essential and the opposition is opposing it for the sake of it."
Ministry official, who was accompanied the insisted during his maiden visit to the city, told Business Standard, "FDI and investment from the private sector can be possible in the sector as a whole in the marketing segment which is currently weak. Further, FDI can be considered in the Khadi Reform Development Programme where 51% will be private sector' s contribution and private sector can have a joint venture with FDI partner in the field of marketing." He however, said the modalities in this regard will be decided soon as the minister has been allocated the ministry on Last Sunday.
Muniyappa's statement is crucial especially when the Centre is engaged in pursuing FDI in multi brand retail. Besides, a meeting of National Development Council is slated for December and the FDI will certainly come up during the meeting.
According to the minister, the ministry will also give a top priority for increasing the availability of finance to MSME sector. "The project size will be increased to Rs 50 lakh from Rs 25 lakh for the availability of finance with banks and financial institutions. The minister said he had already held talks with banks which are keen to provide necessary finances to the sector. Besides, the budgetary allocation fro the sector willbe doubled in the12th plan period," he informed.
Muniyappa said the objective is to increase MSME entrepreneurs to 4 crore in 12th plan from 2.6 crore. The number of beneficiaries will also be increased to 10 crore from six crore.
