Parl Committee calls for strengthening and development of MSME Sector

RSTV Bureau
Representative picture of factory workers

Representative picture of factory workers

The Parliamentary Committee considered the Demands for Grants (2020-21) of Ministry of MSME and expressed concern over underutilization of funds by the Ministry and bulk of expenditure taking place in the later quarters of the year. The Committee suggested various measures for strengthening and development of MSME Sector and urged for developing a culture of entrepreneurship among the populace.

The Committee recommends that MSMEs should be allowed to have one unified GST registration which is applicable to all states. It also recommended that multiple registrations with multiple government agencies for various purposes should be done away with for MSMEs. Inter-Ministries coordination should be improved to bring out one registration to carry out all business activities including exports, tax and day-to-day business activities to improve ease of doing business for MSMEs.

The Committee welcomed the Government’s goal of making India a $5 trillion economy by 2024-25. The Committee observed and opined that the target of becoming $5 trillion economy by 2024 can be achieved by the exponential growth of MSME sector as this sector has the capacity of building up at a low cost and utilizing the modern innovative technology can be made commercially productive at a lower cost.

The Committee recommended that the Government should play a proactive and constructive role in promoting MSME Sector and ease of doing business. More information dissemination to MSMEs regarding the export requirements should be taken care of. Financial institutions should be proactive, friendly and forthcoming. Government regulators should do handholding and play the role of mentors.

The Committee noted that the constraints faced by KVIC/KVIB were mainly due to procedural delays, inadequate technology up-gradation, underutilization of funds etc. Despite providing technical guidance to the units in KVI, the problems of the units remain inadequately addressed as a result of which there is sub-optimal functioning of institutions/units and high dropouts among new entrants and low employment generation.

The Committee recommended that KVIC should come forward with a more holistic and unified policy in coordination with all the stakeholders. Proper planning, monitoring and implementation in each scheme are required to meet the primary objective of employment generation.

The Committee felt that in the face of stiff competition in the market from organized industries, KVIs should concentrate more on the adoption of newer technology and up-gradation of existing technology for products up-gradation.

The Committee recommended that more solar charkha clusters under the Mission Solar Charkha should be given priority in areas of high solar insulation across the country.

The Committee recommended that initiatives should be taken to encourage the production of honey pouches for ready consumption especially in organizations like Indian Railways, Air India, Hospitals, Hotels and other organizations in view of its health benefits. Production of honey pouches should also be encouraged in order to benefit Village Industries artisans and generate employment in the urban areas under the Honey Bee Mission in the country.

Deforestation is one of the major threats for the maintenance of ecological balance. The Committee, in order to avoid grave threats which are endangering the climatic conditions and human life, recommended that the production of substitutes for wood, such as coir wood, has to be encouraged and more coir clusters under SFURTI Scheme should be established to meet the demands of coir based furnishings and building materials from the domestic as well as international market and more funds should be allocated by the Ministry of MSME to the Coir Board.

The Committee recommended that the Ministry of MSME may tie-up with different research organizations, both in government as well as the private sector, for R&D of scientific & technological activities of KVIC and Coir Board. Besides, exhibitions, Seminars, Workshops, Awareness programmes/roadshows all over India may be organized. Incubation & intensive training on the latest technologies developed should be imparted to the industry/beneficiaries free of cost or on a nominal fee.

The Committee desires that the Ministry may pursue with right earnest to put in place a network of incubators in the entire length & breadth of the country to enhance the competitiveness of the MSMEs.

The Committee also urged that steps should be taken so that the MSEs could obtain collateral-free loans from designated Banks under the CLCS-TU Scheme in the same lines as given under CGTMSE Scheme to encourage more and more entrepreneurs to avail the benefits of the scheme and upgrade their technology for quality products.

The Committee suggested that more Incubation Centres should be established in cooperation with State Governments so that training on conventional as well as hi-tech trades are imparted to entrepreneurs for their skill development in areas of business operation for gainful employment.