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: 10 th ; 2011) $4.530 trillion (PPP: 3 rd ; 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

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MINISTRY OF MSME IS HAVING FOLLOWING IMPORTANT SCHEMES

1.

2.

3.

4.

5.

6.

Skill Development Cluster Development National Manufacturing Competitiveness Programme( NMCP) CLCSS CGTMSE Vendor development

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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

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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

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Some Benefits of Clustering Ff

1.Commercial Benefits 2.Economic

Benefits 1.Commercial Benefits 1.Commercial Benefits

1.Enchaned 1. Sharing & Pooling 1 Aids in decongesting 1. Employm chances of of resources units from urban areas -ent securing larger 2. Sharing Business 2. Ensures that generation contracts Development Enviroinmental Barganing in market place 2. Compliance 2.Greater & operating cost safety standards to trade 3. Access to New are maintained related power with Technology 3 Various forms of brriers.

customers pollution always 3 Ensures 3 Greater presence under check enhanced security 4 Guidance during the startup from experienced larger companies with shared risk

Why are Cluster Parks different- a Comparative analogy

1. CLUSTER PARKS 2. INDUSTRIAL ESTATES

1.Focus on enterprises 1. Focus on real estate and their needs 2. No involvement of user 2. Owned and managed enterprises by user enterprises 3. Post marketed 3. Pre- marketed 4. Standard infrastructure 4. Customised infrastructure 5. Absence of collaborative 5. Homogeneous units with behavior. strong linkages and 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.

CODE) MARKETING SUPPORT/ASSISTANCE TO MSMES(BAR 9.

BUILDING AWARENESS ON INTELLECTUAL PROPERTY RIGHTS (IPR) FOR MSME 10.

PROMOTION OF ICT IN INDIAN MANUFACTURING SECTOR (ICT) 21

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.

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.

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% 24% 16% 36%

North East West South

Sr. No.

Zone SPVs formed

1 2 3 4 North East West South

Total

37 16 25 26

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SPVs formed (State wise)

1 2 3 4 5 6 7 8 9 10 S.No.

State

Andhra Pradesh Assam Bihar Delhi Gujarat Haryana Himachal Pradesh Jharkhand Karnataka Kerala

No. SPVs formed

3 2 1 11 8 3 2 3 5 4

S.No.

11 12 13 14 15 16 17 18 19 20 State

Madhya Pradesh Maharashtra Orissa Punjab Puducherry Rajasthan Tamil Nadu Uttar Pradesh West Bengal Uttarakhand

Total No. SPVs formed

2 15 5 11 1 2 13 7 5 1

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SPVs formed (Sector wise)

1 No. of SPVs S.No. Sector/Sub Sector

Auto & Engg. Components

formed

18

2

Ball Bearing 3

3

Diamond Processing 1

4 5

Diesel Engines/Motor&Pump sets Electrical/Electric Fans 2 3 Engg. & Fabrication 19

6 7

Food Processing 6

8

Foundry 4 Granite 1

9 10

Hand Tool 4

11

Handicrafts Apparels and Garments 2 8

12 13

Leather 3

S.No. Sector/Sub Sector 14 15 16 17

Light Engineering Machine Tools Metal Work Oil expellers

18 19 20 21 22 23

Packaging Chemical & Die Units.

Pharma Plastic IT Hardware & Electronics Rice Milling

24 25

Scientific Instruments White Goods

No. of SPVs formed

7 3 1 1 2 1 2 4 1 3 2 3

Total 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

2. Design Clinics Scheme

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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

Design Clinics Scheme – New Products developed by MSMEs (1) Visitor Management System, (2) Improved light weight pump (3) Bottle vision equipment

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Design Clinics Scheme – New Products (1) Portable Hydraulic (2) ENT multi scope (3) Syringe (precision type)

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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

3. Technology and Quality Upgradation Support (TEQUP) Objective:

 Focuses Certification on Energy Conservation, CDM & Product  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

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 and Shortly SFC meeting will be held.

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

Quality Mgt. Systems/Tools (QMS/QTT) ….Contd.

Progress: 1) 2) 3) 4) 5) Course materials for 1800 ITIs prepared and 1745 teachers trained, Course details for Polytechnics is taken up this year.

More than 364 awareness programmes in MSME clusters completed on QMS / QTT topics by expert agencies, Implementation of Quality Mgt .Techniques among MSMEs – 10 clusters has been initiated.

Assist International Study Missions for SME groups – 1 mission to Japan (with 20 SMEs) completed last year.

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

6. I P R Campaign

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Objectives

:  IPR Tools : – –  Patents  Copyrights  Trademark  G.I.

 Indl. Design  Trade Secret  Most MSMEs are unaware of IPR Benefits / Norms  Focused Activities 1) 2) 3) 4) 5) 6) Awareness & Sensitization Programmes Pilot Study Interactive Seminars / Workshops Short / Long Term Training IP Facilitation Centre Assistance for Grant on Patent / GI Registration

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

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

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

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)

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

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