cross-posted from: https://lemmy.ml/post/39807313

Recently at World Trade Center Mumbai roundtable officials from the Ministry of MSME, Ministry of Commerce and Industry, National Centre for Good Governance (NCGG), Niti Aayog and the Cabinet Secretariat attended the meeting, and it was emphasized on how things can be made better for MSMEs.

MSMEs currently suffer the most from overlapping rules and regulations imposed on them by both Centre and State.

MSMEs currently contribut around 15% in India’s GDP and the goverenment’s ambition is to increase share of manufacturing in GDP to 25% and this aim cannot be acheived without uplifting MSMEs.

The above mentioned officials when confronted about this highlighted that goverenment recently scraped nearly 200 Quality Control Orders (QCOs) for raw materials, credit interventions, new export promotion missions and simplification of outdated laws. But the question is, is this enough.

Let me tell you my perspective on this. I really feel goverenment should promote component manufacturing among MSMEs through MSME targeted subsidies. Why I think this is a good Idea, because MSMEs particularly are not that big to create the final product and even if they manage to, they don’t have enough capital to mass produce it, rather than whole product, they can manufacture it’s components. Assembling of this component should be the primary focus of big companies who of course, have ability to derieve profit from them despite high cost.

Also, component manufacturing only requires Raw Material and Transportation Cost. What I think should be done is some sectors should be identified which require medium capital and in which we are highly import dependent, the goverenment should provide MSMEs raw material at subsidized rate and if possible should provide subsidies for transportation of raw material. Also once the produce is excessive and indigenous needs are fulfilled. With time as Indigenous production increases, goverenment should shift to Target Based Incentives (TBI) in which subsdies should only be given when production is up to par. This model should be followed for atleast 8-10 years or more to acheive atleast 60% indigenisation of component manufacturing and once components are here, main product manufacturing will not be that tough.

This is my opinion. I actually have made a whole framework for manufacturing enhancement and even talked to some people about it. If you all want, I can tell you more about it. What do you think about enhancing MSME contribution part.

Feel free to tell me your opinions and if you do not agree with my POV then also feel free to share your opinion.

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