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The MSME Ministry has proposed a subsidy regime for rapid modernisation of units with an annual turnover of less than ₹5 crore, says a draft consultation paper on the new policy framework being worked out for medium, small and micro enterprises (MSMEs).
‘Make in India’ push Referring to about 3.6 crore MSMEs in the country as the “cradle of Make in India”, the policy paper aims to turn small enterprises into large ones, citing the examples of foreign companies, such as Honda, Microsoft, Infosys and HCL in India.
Pointing out the “large vacuum” in the existing policy space that needs to be addressed, the paper says: “…With some honourable exceptions, policies are concentrating on regulatory regime and subsidy frameworks. Some additionalities would be noticed in various States, depending on their own needs. But an existing business having a turnover of ₹5 crore, which in the international context would still be considered a “Micro Business”, does not have an enabling framework to grow to ₹50 crore, or a ₹50 crore turnover company does not have an enabling framework to grow to ₹500 crore.”
In line with Prime Minister Narendra Modi’s call for ‘zero effect’ to ensure environment compliance, pollution control and energy-efficiency, the draft proposes a framework to categorise MSMEs into green, orange and red. However, it also makes it clear that the “Pollution Control Board cannot impose such a compliance load on industry as to make it unworkable.”
Credit access To get over the long-standing problem of credit access, the paper suggests a “mechanism of pooling MSME needs and acting as an intermediary for providing debt at international prices (but including exchange risk coverage).”
The policy framework should also have growth acceleration for the larger industries, say with a turnover of over ₹ 100 crore. “This segment will not need Government subsidy, but would need policies based on which they can grow and become globally competitive,” it says.
The consultation paper has invited suggestions within 45 days.
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