The Hindu Business Line : ISED(Kerala) seeks innovation policy for SMEs

THE Kochi-based Institute of Small Enterprises and Development (ISED) has suggested to the Union Finance Minister to announce an innovation policy for the SME sector in the next Union Budget.

In its proposal submitted to the Finance Minister, the ISED has urged the Ministry to set up an expert committee to workout the modalities in this regard, in consultation with the Ministry of SSI, Dr P.M. Mathew, Director, ISED, told Business Line.

He said detailed studies should be commissioned so that the findings could be incorporated in the Union Budget.

According to him, the activities of the Ministries of Small-Scale Industries and Agro and Rural Industries should be restructured, under two Divisions - SME Innovation and SME in Local Economic Development (LED).

The former Division should cater to the imperatives of growth of this sector, whereas, the latter should focus more on the social aspects of regional balancing and employment generation.

Besides, the thrust on LED needs to be in correspondence with the latest thinking of the International Labour Organisation (ILO) as well. This will also help public policy to focus increasingly on job quality, along with enhancement of employment opportunities, he said.

An SME Innovation Fund should be set up with a corpus of Rs 500 crore and should be administered by SIDBI. It should be used for training, exposure programmes, support to innovative professional agencies, awards for successful entrepreneurs, research activities, and international exposure programmes for stakeholders.

All the present day activities, of the Ministry of SSI and various related agencies, should be merged with this larger programme.

The restructuring should take place by dividing the Prime Ministers' Rozgar Yojana (PMRY) based on two different thrusts: creation of growth oriented and innovation oriented enterprises and creation of employment-oriented enterprises.

Accordingly, the funding norms for the former category should be raised from Rs 1 lakh to Rs 5 lakh.