Welcome
Participants and Delegates
Dr. D.S. Mandloi,
Director
MSM E Development Institute
MINISTRY OF MSME
Govt. Of India
Indore
24.2.2013
INDIA STATSTICS
 GDP
•
•
•
•
$1.847 trillion (nominal: 10th; 2011)
$4.530 trillion (PPP: 3rd; 2011)
Contribution of sectors: agriculture: 17.2%,
industry: 26.4%, services: 56.4% (2011 est.)
Labour fource – 48.76 crores
Labour distribution -agriculture: 52%, industry:
14%, services: 34%
MSME Contribution ; Manufacturing - 40 %,
Export - 45 %, GDP including all – 17 %
MSME SCENERIO
IN
INDIA
ACTIVITY – WISE MSMEs
SERVICE WISE MSMEs
FIXED INVESTMENT
EMPLOYMENT
Micro, Small & Medium Enterprises
MSME SCHEMES
Implemented by
Ministry of Micro, Small and Medium Enterprises
Government of India
New Delhi
9
MINISTRY OF MSME IS HAVING
FOLLOWING IMPORTANT SCHEMES
1. Skill Development
2. Cluster Development
3. National Manufacturing Competitiveness
Programme( NMCP)
4. CLCSS
5. CGTMSE
6. Vendor development
10
Cluster : Definition & Principle
DEFINITION :
GEOGRAPHICAL CONCENTRATION OF UNITS
PRODUCING SIMILAR PRODUCTS AND FACING
SIMILAR THREATS AND OPPORTUNITIES
PRINCIPLE :
COLLABORATING WHILE COMPETING
11
Why Cluster Based Approach ?
 Offers critical mass for customization of interventions.
 Economies of Scale
 Better Access to Technology, information
 Greater access to customers, channels
 Cheaper access to inputs, raw materials
“ Cluster approach should be preferred route for improving the
manufacturing competitiveness. New and innovative approaches to
cluster development should pe adopted “- NMCC
12
Not forgetting the Social Capital which is a
prerequisite for SME common
infrastructure
 Awareness Creation
 Sensitization
 Trust
 Organisation
 Capacity Building
 Competitive reliance on one another
13
Some Benefits of Clustering
Ff1.Commercial
Benefits
1.Enchaned
chances of
securing larger
contracts
2.Greater
Barganing
power with
customers
3 Greater presence
in market place
4 Guidance
from
experienced
larger
companies
with shared
risk
2.Economic
Benefits
1. Sharing & Pooling
of resources
2. Sharing Business
Development
& operating cost
3. Access to New
Technology
1.Commercial
Benefits
1.Commercial
Benefits
1 Aids in decongesting 1. Employmunits from urban areas
-ent
2. Ensures that
generation
Enviroinmental
2. Compliance
safety standards
to trade
are maintained
related
3 Various forms of
brriers.
pollution always
3 Ensures
under check
enhanced
security
during the
startup
Why are Cluster Parks different- a Comparative analogy
1. CLUSTER PARKS
1.Focus on enterprises
and their needs
2. Owned and managed
by user enterprises
3. Pre- marketed
4. Customised infrastructure
5. Homogeneous units with
strong linkages and
collaborative behavior
2. INDUSTRIAL ESTATES
1. Focus on real estate
2. No involvement of user
enterprises
3. Post marketed
4. Standard infrastructure
5. Absence of collaborative
behavior.
Integrated Infrastructural Development (IID) Scheme
(Subsumed in MSE-CDP)
 To provide developed sites with basic infrastructural facilities like
power, water, telecommunication, drainage,& pollution control
facilities roads, Banks, Raw Material Storage, Marketing Outlets,
common facilities services,& Technological Backup Services etc.

The GOI grant will be 60 % of the cost of project of Rs 10
Cr.(excluding cost of land). Fund will be released on
reimbursement basis or on matching share basis.

Breakup of Fund :1. Land Development & Other Overhead infrastructure : Rs 7.50 Cr.
2. Administrative & Other services complex – Rs 1.50 Cr.
3.Effluent treatment facilities – Rs 0.80 Cr.
4. Contingencies and pre-operative expenses – 0.20 Cr.
FUNDING PATTERN: CFC

Special Purpose Vehicle (SPV), i.e., Society/ Trust/ Co. to
be formed by cluster beneficiaries before seeking funds for
Common Facility Centre (CFC),

For CFC, GoI support is 70 % of the cost of project of
maximum 15 Cr.

Cluster beneficiaries’ share should not be less than 10% of
the total cost of CFC, the cost of project includes Cost of
Land( subject to maximum 25 % of project cost), Building,
Pre- Operative expenses, Machinery & equipment etc.

State Government contribution will be considered as the
viability gap funding.
National Manufacturing Competitiveness
Programme (NMCP) for MSME Sector
Challenges faced by Indian MSMEs

Access to Technology

I.P.R. related issues,

Design as market driver

Wasteful usage of resources / manpower

Energy in-efficiency and associated high cost

Low ICT usage

Low Market penetration

Quality Assurance / certification.
National Manufacturing Competitiveness
Programme (NMCP) for MSME Sector
Objectives
 Focus on increasing competitiveness of MSME sector
 Key initiative for survival of MSMEs in domestic /
international markets
 A catalyst approach / create role models
 Implementation with Public Private Partnership
Challenges for implementation
 Basically a Supply side initiative
 Fear of MSMEs in disclosing data.
 MSMEs are hesitant in investing their contribution.
NATIONAL MANUFACTURING
COMPETITIVENESS PROGRAMME (NMCP)
 1.





Lean Manufacturing Competitiveness Scheme for
MSMEs
2. Design Clinic Scheme for design expertise to MSMEs
Manufacturing sector (DESIGN)
3. Marketing Assistance & Technology Up-gradation
Scheme in MSMEs.
4. Technology and Quality Upgradation Support to
MSMEs
5. Mini Tool Rooms proposed to be set up by Ministry
of MSME (MTR)
6. Quality Management Standard & Quality Tech. Tools
(QMS/QTT)
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•
7. DEVELOPMENT OF SMES THROUGH INCUBATORS
8.
MARKETING SUPPORT/ASSISTANCE TO MSMES(BAR
CODE)
9.
BUILDING AWARENESS ON INTELLECTUAL
PROPERTY RIGHTS (IPR) FOR MSME
10.
PROMOTION OF ICT IN INDIAN MANUFACTURING
SECTOR (ICT)
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1. Lean Manufacturing Scheme
 Objective: To minimize wastages in manufacturing
 Lean Manufacturing (LM) is Better Production of Goods by
 Eliminating Non-value Added Activities / Wastes
 Helping to Produce More with Same Resources
 Scheme is under operation on pilot basis for 100 mini clusters
 NPC is working as Monitoring & Implementing Agency
 Evaluation completed for current scheme and further up-
scaling EFC note being processed.
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Lean Manufacturing Scheme
Implementation approach
 Initially cluster units to be made aware regarding
lean techniques
 ‘Mini Clusters’ of 10 units (appx.) to be created
 SPV to be formed by ‘Mini Cluster’.
 GOI : Private Share – 80:20
 Max. cost of LMC to be Rs. 23.5 lakh
 Monitoring of milestones by NMIU.
23
1S implementation - scrap yard
Before
After
Removed the scrap in scrap yard. &
create the space for die storage
2S implementation - Packing &
dispatch area
Before
After
Packing & dispatch area –
unwanted material removed
Shining Example for Shadow
Board
Before
After
SPVs formed (Zone wise)
24%
Zone
SPVs
formed
1
North
37
2
East
16
3
West
25
4
South
26
Total
104
36%
24%
16%
North
Sr. No.
East
West
South
SPVs formed (State wise)
S.No.
State
No. SPVs
formed
S.No.
State
No. SPVs formed
1
Andhra Pradesh
3
11
Madhya Pradesh
2
2
3
4
5
6
Assam
Bihar
Delhi
Gujarat
Haryana
12
13
14
15
16
Maharashtra
Orissa
Punjab
Puducherry
Rajasthan
7
Himachal Pradesh
2
1
11
8
3
2
17
Tamil Nadu
15
5
11
1
2
13
8
Jharkhand
3
18
Uttar Pradesh
7
9
Karnataka
5
19
West Bengal
5
10
Kerala
4
20
Uttarakhand
Total
1
104
SPVs formed (Sector wise)
No. of SPVs
formed
Auto & Engg. Components
18
S.No. Sector/Sub Sector
1
S.No. Sector/Sub Sector
14
Light Engineering
No. of SPVs
formed
7
2
Ball Bearing
3
15
Machine Tools
3
3
Diamond Processing
1
16
Metal Work
1
Diesel
Engines/Motor&Pump sets
Electrical/Electric Fans
2
Oil expellers
1
Packaging
2
Engg. & Fabrication
19
1
7
Food Processing
6
20
Chemical & Die
Units.
Pharma
8
Foundry
4
21
Plastic
4
Granite
1
1
Hand Tool
4
IT Hardware &
Electronics
Rice Milling
Handicrafts
2
24
Scientific Instruments
2
Apparels and Garments
8
25
White Goods
3
Leather
3
4
5
6
9
10
11
12
13
3
17
18
19
22
23
Total
2
3
104
Lean Manufacturing Scheme (Constraints)
 Lean Manufacturing is a comparatively new initiative
(on such a large scale) hence MSMEs are initially
hesitant
 Reluctance in data sharing
 SPV formation is time consuming
 NPC has limited resources for monitoring on large
scale, hence some more agencies are required
 Good LMCs not inclined to work with MSMEs
 Pvt. Share is not being contributed as per schedule
 Difficulty in co-ordination among 10 units
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2. Design Clinics Scheme
 Objective:
 To Bring the industrial design fraternity closure to the MSME sector
 Increase the competitiveness of local products / services through design
 Develop an institutional base for the industry’s design requirement
 Major activities :
 Setting up of design clinic centre - HQ
 Regional Centres – 4 Nos.
 Awareness seminars and workshops – 200 Clusters.
 Design projects for individual MSME or a group of MSMEs
 Students Projects
 Orientation Programme for Designers
NID & IISc. Are the nodal agency
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Design Clinics Scheme – New Products developed by MSMEs
(1) Visitor
Management
System,
(2) Improved
light weight
pump
(3) Bottle vision
equipment
32
Design Clinics Scheme – New Products
(1) Portable Hydraulic
(2) ENT multi scope
(3) Syringe (precision type)
33 33
Design Clinics Scheme (Constraints)
 Lack of inclination of Industrial Design professionals
towards MSMEs
 MSMEs hesitant to contribute their share
 Sector specific design institutes not yet actively
involved
 MSMEs still believe in copy – paste rather then
innovation
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3. Technology and Quality Upgradation Support
(TEQUP)
Objective:
 Focuses
on
Energy
Conservation,
CDM
&
Product
Certification
 Activities Proposed:
1) Awareness Generation for Energy Efficient Technology
2) Credit Linked subsidy for EET Projects (25 %)
3) Encourage MSMEs through subsidy to acquire National
as well as International Certification of Products
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ENERGY EFFICIENT TECHNOLOGY FOR MSME SECTOR
Roller kiln - Morbi ceramic cluster
Boiler - Plywood unit, Ernakulum
Re-cupeater – pot furnace Firozabad
4. Promotion of ICT in MSME sector
 The
modified
ICT
Scheme
with
cloud
computing approach has been concurred by
Planning
Commission
meeting will be held.
and
Shortly
SFC
Advantage of Cloud Computing
• Capital Expenditure(CAPEX) is getting
•
•
•
•
converted into operational expenditure
(OPEX).
Device and Local independent
Centralized meeting system.
Pay as you use model facility
MSMEs does not have to invest in IT
personnel for maintenance purpose.
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Components of Cloud Computing
• Software as Service
• Portal as Service
• Infrastructure as Service
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5. Quality Mgt. Systems/Tools (QMS/QTT)
Objectives:
 Scheme to support awareness generation as well as implementation of
Quality System Tools in MSME sector
 Conforming to International Standards, 5S, Six-sigma, TQM, TPM
 ISO 9000, ISO 14000, ISO18000, ISO 22000 etc.
 Major activities to propagate Quality Management in MSMEs are:
1) Compulsory Courses in Govt . ITIs / Polytechnics
2) Awareness Programmes in Clusters on QMS / QTT topics
3) Implement Quality Mgt Techniques among MSMEs
4) Special Studies for Threatened Products
5) Assist International Study Missions for SME groups
6) Organize National level workshop on QMS/QTT
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Quality Mgt. Systems/Tools (QMS/QTT) ….Contd.
Progress:
1)
Course materials for 1800 ITIs prepared and 1745 teachers
trained,
2)
Course details for Polytechnics is taken up this year.
3)
More than 364 awareness programmes in MSME clusters
completed on QMS / QTT topics by expert agencies,
4)
Implementation of Quality Mgt .Techniques among MSMEs –
10 clusters has been initiated.
5)
Assist International Study Missions for SME groups – 1 mission
to Japan (with 20 SMEs) completed last year.
41
QMS/QTT (Constraints)
 QMS/QTT implementation not yet sanctioned due to IFW
insisting on competitive bidding for engaging expert
agency
 Limitation to use only clusters from Threatened product
catagory
 QMS/QTT courses yet to be prepared for Polytechnics
 State Govt not sparing ITI teachers for training
 MSMEs / Associations Hesitant to give contribution
 Medium units not included
42
6. I P R Campaign
 Objectives:
 IPR Tools :
–
 Patents
 Trademark
 Indl. Design
–
 Copyrights
 G.I.
 Trade Secret
 Most MSMEs are unaware of IPR Benefits / Norms
 Focused Activities
1) Awareness & Sensitization Programmes
2) Pilot Study
3) Interactive Seminars / Workshops
4) Short / Long Term Training
5) IP Facilitation Centre
6) Assistance for Grant on Patent / GI Registration
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IPR Campaign (Constraints)
1) Lack of Awareness, Knowledge & Expertise
2) Lack of confidence in Enforcement mechanism and
perception of higher cost of Monitoring & litigation.
3) Majority of MSMEs do not have IP Strategy in place.
4) Shortage of Trained Human Resources
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7.
Incubators
Objectives:
 Assist Incubation of Innovative Ideas
 Promote Emerging Technological
Innovative Ventures
 Encourage Ideas to Become MSMEs
&
Knowledge-based
 100 BIs to be Located in engineering colleges, management
institutions and R&D Institutes @ 25 p.a in 4 yrs.
 Govt. Grant (Max. 85%) = Rs.4 - 8 lakh per Idea
 Each BI to Assist 10 Ideas / Units – Max. Rs.62.5 lakh + Rs.3.78 for
Infrastructure & Training.
 BIs to support and Nurture ideas for commercialization in a year
45
8. Marketing Assistance and Technology
Upgradation Scheme for MSMEs
 Objectives:
 To enhance MSMEs competitiveness in the National as well as
International market through following activities;
 Major activities:

Technology up gradation in packaging

Skill up gradation /development for Modern marketing techniques

Special component for NER clusters

State/District level local exhibitions

Corporate governance practices

Marketing hubs

Reimbursement to ISO 18000/22000/27000 certification
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9. Bar Code
Objectives:
 Bar Coding assist in popularizing MSME Products, especially
for Exports & Retail
 Bar Coding an effective Tool to improve marketability
 Reimbursement allowed :
 75% of Annual Fee for first 3 years (Bar Code Certificate)
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10. Mini Tool Rooms on PPP Mode
 Objectives:
 Scheme to Develop 15 new Mini Tool Rooms
 For Technological Support to MSMEs
 By Creating Capacities in the Private Sector
‘Mini Tool Rooms’ can be set up, :
 With GOI assistance restricted to Rs.9.00 cr.
 PPP is the Preferred Option (Model – I),
- Private partner as promoter
- VGF of 40% restricted to Rs. 9.00 cr.
- Remaining resources by promoters
- O & M by promoter
OR
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Model- II (State PPP Model):
- SPV (State Govt. with private partner)
- 90% of cost of machinery, restricted to Rs. 9.00 cr.
- Remaining cost of M/c, L & B, recurring exp. by SPV.
- State Govt. share > 26%.
- O & M by SPV
OR
Model- III (Centre / State Model):
- State Govt. / State Govt. agency to identify
Implementing Agency (IA)
- 90% of cost of machinery, restricted to Rs. 9.00 cr.
- Remaining cost of M/c, L & B, recurring exp. by IA
- O & M by IA
Thank You
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