With the Centre forming a separate ministry of micro, small & medium enterprises (MSME) and Prime Minister Manmohan Singh recently constituting a taskforce on MSMEs, the sector is poised on the brink of an exponential growth. This is especially true in context of the recommendation of the taskforce to reserve 20% of all government procurement for the MSME sector.
?If implemented in proper spirit, this and many other recommendations will have a far-reaching impact on the MSME sector. It is going to change the scenario completely,? HP Kumar, chairman, National Small Industries Corporation (NSIC) said at a workshop on the present and future scenario for MSMEs, organised by the Indian Industries Association, in Lucknow.
Affirming that the next decade belongs to the MSME sector and that it would be the main driver of the economy, Kumar highlighted the fact that while the total size of government purchase at present is Rs 6-7 lakh crore, purchase from MSME sector accounts for only Rs 40,000 crore. ?However, government purchase is set to grow at 10-15% annually, which means that next year, the total size of the purchase would be around Rs 8 lakh crore. Hence, with 20% reservation, the value of purchase from the MSME sector would accordingly increase from Rs 40,000 crore to Rs 1,60,000 crore. Such tremendous growth will occur for the MSME sector with the implementation of only this particular recommendation and when all other recommendations are also affected, the impact can be well imagined,? Kumar said.
NSIC has also been given an important role in implementing the taskforce recommendations such as facilitating tenders, flow of bank finance and raw material availability for the MSMEs.