ASSOCHAM for forming effective MSME policy in Madhya Pradesh

Bhopal, June 5, 2013: Apex industry body ASSOCHAM today suggested the formation of a high-power committee headed by Minister of Commerce and Industry of Madhya Pradesh (MP), Mr Kailash Vijayvargia to draft an effective policy to accelerate the growth and development process of marginal, small and medium scale (MSME) industries operating in various sectors across the state of Madhya Pradesh.

"There is an urgent need to evolve an effective strategy comprising various significant aspects like marketing, working capital management, technological upgradation, inter-linkage amid MSMEs, cluster development, skill development, facilitating micro credit, financial inclusion and revival of sick industrial units in wake of rising land prices," said a study titled ‘Madhya Pradesh-Enhancing Capacity for Sustainable Growth,' released by Mr. Kailash Vijayvargia, Minister of Commerce and Industry, MP, Mr. P.K. Dash, Additional Chief Secretary Government, MP and Mr. UK Joshi, Director of The Associated Chambers of Commerce and Industry of India (ASSOCHAM).


"The MSME sector accounts for about 45 per cent of India's total manufacturing output, about 40 per cent of India's total exports, thereby employing over seven crore people in over three crore units spread across the country manufacturing over six thousand products ranging from traditional to high-tech items," highlighted the study released at the ‘8th SMEs Sammelan-Enhancing Capacity for Sustainable Growth,' organized by ASSOCHAM in Bhopal today.

"High cost and lack of availability of adequate and timely credit, limited access to equity capital, problems relating to storage, designing, packaging and product display, lack of access to global markets and modern technology, inadequate basic infrastructure facilities, dearth of manpower, multiplicity of labour laws and others are certain key challenges faced by the MSME sector in India," according to the ASSOCHAM study.

Suggesting a roadmap to promote and develop marginal, small and medium enterprises (MSMEs) in Madhya Pradesh (MP), the ASSOCHAM study has recommended for adopting a consortium approach to solve the marketing related problems of the MSME sector.

Besides, the study has also suggested to periodically review the activities of ensuring effective financial arrangements for the MSMEs. Technological upgradation is another significant area which requires immense government attention to promote growth and development of MSME sector in MP.

The potential to create synergies between tiny, small, medium and large enterprises must be exploited so they can thrive collectively leading to industrial development, thus ASSOCHAM study has suggested the MP government to encourage developing and strengthening linkages between tiny, small and medium industries.

ASSOCHAM forming effective MSME policy

The apex chamber has also suggested for organizing seminars and workshops to impart technical know-how to the MSME workforce with due support from central government, technology institutes and universities.

Garment, leather, silk and soya processing industries be placed in the thrust sector to fully exploit their export and employment potential.

There is also ample of scope to develop the entrepreneurial culture and be further improved through specialized training, technical assistance and general consultancy services through professional institutions.

A cluster development approach should be implemented to ensure sustainable growth of industries and this requires major initiatives to develop ancillaries and voluntary organizations to provide necessary linkages. Besides, ASSOCHAM has also suggested for extending external assistance from agencies like UNIDO, UNDP, ESCAP and others.

The MSME units venturing in information technology (IT), e-commerce, networking, multi-media, data communication, value added services and others must be assisted through the venture capital which is ideal for knowledge and technology based industries.

There is also the need to undertake skill development initiatives at all levels to ensure that MSMEs are able to hire skilled and competent manpower.

A comprehensive, district-wise drive must be undertaken by the state government through Directorate of Industries for identifying potentially viable sick units.

Considering there is a gap between demand and supply of micro credit, it is suggested that state government together with leading microfinance companies, non-governmental organizations (NGOs), self-help groups (SHGs) and others should come forward and provide loans to micro-entrepreneurs esp. in handicrafts and handloom sector.


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