Upkar Singh Ahuja President CICU – India cannot become Atamnirbhar without straightening MSME

News Punjab

Ludhina , July 12 – Making India Atam Nirbhar and 5 Trillion economy is not possible unless Government support MSME and Manufacturing Sector. MSME sector is back bone of Indian economy. MSME  sector provides a wide range of services and is engaged in the manufacturing of over 6,000 products – ranging from traditional to hi-tech items. As per the official estimates, there are about 64.00 million MSME in the country. with change in Definition of MSME 99 percent of business falls under MSME .India has very low industrial base as compared to other Asian countries, the MSME in micro and small sector have high potential to develop and grow. If india really wants to grow electricity rate to be rs 3per kw, Liquidity available easy for MSME with low rate of interest , improve transport infra, lower GST etc ,relook export incentive like no income tax on export.

 In the current scenario even after a long lock down demand still exists and few sector like Tractors, Bicycle, FMCG products are still in good demand, it give a clear indication  that demand will not reduce  and Indian GDP will stable and as soon as Crone effect reduce GDP will grow. India’s Micro, Small, and Medium Enterprises (MSMEs) base is the largest in the world after China. If we analyze, even products with low technology  like Toys, Bicycle parts, Diwali Lights & Crackers, Holi Colors & Pichkaries, Auto Components like Chain, Pistons etc. we import from China. Micro, Small and Medium have a potential to grow 200% in 3 years if government fix the issue.

Upkar Singh Ahuja, President CICU in his letter to honorable Prime Minster Office and Sh. Nitin Gadkari has suggested following steps to be taken to become Atam Nirbhar with immediate effect:-

• Budget of Ministry of MSME to be increased, at present it is Rs. 7572 Cr for 2020-21,it should be increased four times of present budget  so that Ministry can give maximum support to the Industry.

MSME schemes for technology upgradation, manufacturing upgradation like CLCSS & TUF to be given more attention and making there schemes easy accessible will help the industry to upgrade itself.

• There is shortage of Good Tool Room and tech centers. Cluster support  limit must be increase from present 20 crore to 50 crore for Common Facility Centre like Tool Room, tech Center etc.
• Related to Custom duties, it should be structured in a way that duties on Raw Material like Steel, Plastic should be lower and for ready products like  Bicycle &  it’s parts, Auto Parts, Sewing Machine, it should be higher so that rather than exporting raw material, Indian industry should export more value added production.it will give more jobs and more growth.
• Anti-dumping on raw material likeSteel & Plastic etc must not be imposed. Govt. must facilitate Raw Material at Lower price.in china steel is approx. rs7 cheaper than india that’s why india cannot compete china in many steel products domestically and internationally
• Power is a major contributor, It should be one rate nation vide in China it is Rs. 3/Kwh. Steps must be taken to reduce the electricity cost.
• Indian Labour Laws to be designed to make labour  result oriented, skilled  and more labour productive. In China one plus point is that even the labour is costly but their productivity is three times higher than that of Indian labour.  Skill development Cantal budget allocation 2020-21  is 3000 crore but industry is not getting adequate  skilled manpower, industry should be facilitated with skill development centre within factories to make skill development more effective .
• Transportation cost is very high in India, for domestic as well as for import & export too. For example shipping of a container from Ludhiana to sea port Mundra or Nhava Sheva and loaded into Vessel , it takes 7-8days. This should be reduced to 48 hours. Time factor is very important for import & export.it makes indian industry uncompetitive is a huge wastage, Railway  freight for containers is very high. Approx. 55000 for 20 feet container, carrying 20 tons rs 2750 per ton. its more than fright from Dubai or Shanghai to any seaport.  
• Liquidity is one of the bottle neck. Bank should lend 35% of the turnover as working capital to MSME. At present banks sanction 10 to 20% of the turnover. Collateral Security coverage of 50% should be considered. Loan for capital goods, purchasing machinery for expansion & technological upgrading should have no bar for performing units. CIBIL score to be relaxed for MSME for one year. Banks are not providing even  proposed by RBI 20% additional loan to MSME.

 The indian Msme are competent enough to grow need of the hour is to fix the attributes making industry in uncompetitive