Consolidated approach to develop cluster micro and small industries

Consolidated approach to develop cluster micro and small industries
Statement by Mr. Vijay Kalantri, President – AIAI
 
All India Association of Industries(AIAI) is a premier Chamber of Commerce , an apex body  representing the trade, industry and employment since 1956 . AIAI is a think tank established to suggest government about remedial measures in the changing economic scenario.
 
Mr. Vijay Kalantri, President, All India Association of Industries (AIAI) said that, the state of Maharashtra houses around three million MSMEs  which are the backbone of the State’s economy. Apart from being an automobile hub, Maharashtra is also a leader in agro and food processing industries. However , the same are bearing the brunt of the  LOCKDOWN , GLOBAL RECESSION and  DOMESTIC SLOWDOWN.
 
At a time, when large groups and corporate who have withstood the effects of global recession and domestic slowdown , it becomes difficult for the MSME to confront the same due to paucity of finance.
 
In such a situation the DICs in handshake with Industry Associations can  take up the issues concerning the MSME in a better shape and help them survive, revive and thrive, Magnetic Maharashtra.
 
“One district/cluster/village one product  or even more products per district can be marketed under a brand for exports and domestic consumption” , should be the ideal approach.
 
The District Industries Centre works at the ground level and is the direct contact between the start up or the existing MSME at the District level, which provides all the services and support facilities to the entrepreneur for setting up Micro, Small and Medium Enterprises. 
 
There is already an infrastructure existing with the DIC which facilitates entrepreneurial start up however a collaboration with Industry Association will make the DIC,
 
1. Resilient to the need of such Start Ups or help existing MSME affected by systemic issues beyond their control.
 
2. Understand the need for the fine tuning of the schemes with needs of the industry.
 
3. Facilitate accurate feasibility reports.
 
4. Understand the arrangement for credit facilities, 
 
5. Help in tweaking country specific import and export facility in case of crucial supply of machinery and equipments,  raw materials etc.
 
6. Help introduce International community expertise  to domestic MSME.
 
7. Develop world class incubation centers and tool design centers.
 
Thus, Association with Industry associations will help them to  play a more active role in advocacy and capacity building for potential and existing entrepreneurs.
 
Me. Kalantri further suggested that, wherever viable, active involvement of the private sector  for revamping the DIC network should be considered. Such re-engineering of the DICs at state level should also be supported by the Central Government.
 
At the same time , the DIC needs to be strengthened with provision of modern IT-enabled communication facilities and re-training of human resources available with these institutions. As the DICs form the bedrock of MSME promotion, they should be urgently strengthened, revitalized and transformed.
 
In case of sickness in MSME units the DICs need to be made the epicenter and first step towards resolution. DICs should be supported by the State and Central Government to set up Rehabilitation Funds and operationalise appropriate schemes for the rehabilitation of units temporarily rendered sick due to circumstances beyond their control. 
 
It is suggested that the state governments may establish a mechanism at the district level, in the DICs, to re-examine the viability of sick units in coordination with the banks and implement rehabilitation packages in a time bound manner.
 
In addition to the above Micro Finance Institutions (MFIs) in congruence with DICs need to finance micro enterprises in unbanked/identified excluded rural/semiurban areas at reasonable rates. Banks may also be encouraged to formulate schemes for  refinancing loans taken by the MSMEs from non-institutional sources/moneylenders. Financial outreach is likely to prove an effective means to formalize the unorganized sector especially in case of micro units. 
 
Cluster development and SME development could be achieved through funding from MSFC. So that MSMEs haven’t to go from pillar to post in search of funding.
 
Also, in reference to cluster development , there needs to be a study in place to understand the needs of cluster development. And which districts have potential in manufacturing and processing, identifying the need of the district.
 
There should be atleast one district one product framework in place. In the same district, one and more than one if possible products can be marketed under one brand and domestic consumption and exports.
 
Government needs to revive and strengthen by using more funds in MSFC and SICOM. Both these institutions need to revive which can actively fund Micro, SMEs and MidCaps.
 
Both these institutions have been put on backseat and need to be revived so that cluster and MSME development programs could be achieved through funding from these organizations. So that they don’t have to go pillar to post for the same.
 
Further permissions should be one desk online. With no inspector Raj and bottlenecks such as harassment from locals against which there should be assured government support.
 
Turnaround is sure if such strategies are in place.
 
MSMEs do think big and out of the box , however it is the game of money to sustain in business unlike the big groups, it is not possible for the MSME to play with money and hence they require firm governmental support. To think big and do big.
 
Turnaround in MSME growth and value addition to state and central exchequer is for sure.