Forward looking policies give the sector high hopes about the New Year
In 2014, India’s micro, small and medium enterprises got a fair share of attention from the government. In the Union budget for 2014-15, the government announced a R10,000-crore fund to act as a catalyst for the MSME sector. A sum of R200 crore was earmarked to set up a technology centre network to promote innovation, entrepreneurship and agro-industry. Although things are yet to fall in place, we can expect substantial momentum on these in the new year.
The success achieved by the recent start-ups show a promising future for the MSME sector. The government is taking various measures to increase the sector’s competitiveness in the international market.
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Prime Minister Narendra Modi’s Independence Day speech gave an impetus to the sector’s aspirations. The “Make in India” campaign, inviting foreign manufacturers to pace up India’s industrial growth, opens myriad opportunities for the sector. So does the Digital India initiative. The youth of India has been given a playground to come and unleash their entrepreneurial skills.
States have joined the efforts in their own way. For instance, the government of Karnataka provides several facilities to the start-up community of the state. For providing global exposure and mentoring to the start-ups in the state, the UK Trade and Investment Board has recently come into a partnership with the Karnataka Information Technology Venture Capital Fund. The state is planning to set up two new venture funds and a network of incubators in small cities to pace up entrepreneurial activities.
Similarly in Kerala, the government would invest 1% of the state’s budget in the new start-ups mushrooming in the state. The Start-up Village of Kochi was established through a public-private partnership to nurture around 1,000 start-ups over 10 years. The Maharashtra government gives many incentives for MSMEs, ranging from power tariff subsidy to tax refunds.
The Maharashtra Centre for Entrepreneurship Development, an autonomous body under the department of industries, offers entrepreneurship training programmes focused on banking, food processing, agritech and others across the state.
West Bengal is one of the leading states in terms of credit flow to the MSME sector. The state government has set up myEnterprise.wb.gov.in as one common link for all applications. The Telangana government proposed a new industrial policy from December 1 which speaks about a separate empowered State-Level Bankers’ Committee exclusively for SMEs and creation of an Insurance Fund as well. Rajasthan has a huge potential of being developed as the SME hub of India. Power2SME is closely working with the SME segment in the region to provide it with a platform for easy credit and cheaper raw material.
The Swachh Bharat programme has also opened up a host of opportunities for start-ups, especially for those in the health, hygiene and sanitation segments.
Apart from government initiatives, funding by local and foreign investors, introduction of advanced technologies in the market and online platforms like retail and trade portals have aided the growth of SMEs in 2014. For instance, free online financing platforms like SMEcorner.com were launched to make borrowing easy for SMEs, while the buzz around Flipkart and Snapdeal helped several SMEs to opt for online marketing.
With the forward looking policies of the central and state governments, the MSME sector has high hopes from 2015. The central government has already announced its plan to expand the scope of the ‘Make in India’ programme by including five more sectors, including gems & jewellery and SMEs in it. I strongly feel 2015 is the year for the SME sector and the coming decade will prove as a golden decade for the SME segment in India.
By R Narayan
The author is founder & CEO, Power2SME