The Hindu Business Line : Outsourcing can provide SMEs a bright future: CII

THE Government needs to provide an environment for competitiveness for Micro and Small and Medium Enterprises (MSMEs) to prosper in a globalised economy rather than doling out concessions. This can be done through facilitating technological upgradation, better access to credit, mentoring and marketing assistance. These were the recommendations of the recently concluded India Global Summit on MSMEs, jointly organised by CII and Ministry of Small Scale Industries and Agro and Rural Industries, Government of India.

In May this year the Small and Medium Enterprises Development Bill was introduced in Parliament to integrate MSMEs in a single legal framework, enhance competitiveness and enable their transition from tiny to small to medium size. The bill will facilitate the acquisition of new technology, feels CII. The Government of India has launched programmes for upgrading SME technology and providing financial assistance for MSMEs. It has also launched a cluster development programme and a capital subsidy scheme for the sector. In addition, it has taken legislative measures to enhance the competitiveness of MSMEs.

MSMEs account for 90 per cent of total industrial units.

They employ 13 million and contribute to 40 per cent to the overall industrial production and 33 per cent of the exports.

Micro-enterprises are critical for improving the standard of living of people in rural areas as they can be started with small amounts of capital and provide jobs to groups of 10 or more people.

With trade barriers falling, there are greater opportunities for MSMEs to become part of a global supply chain.

Large manufacturing companies are outsourcing their production to low-cost economies and if India's small sector can upgrade its technology to suitable levels, their potential market is huge, says CII.

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