Creating competitive msm es 21_56_74
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Creating competitive msm es 21_56_74 Presentation Transcript

  • 1. Presented By: Dhariti Walia(10810021) Saryu Kamra(10810056) Yuki Jain(10810074) Creating Competitive SMEs in India
  • 2. Agenda
    • Overview of Indian MSMEs
    • Opportunities for MSMEs
    • Challenges being faced by MSMEs
    • Creating Competitive SMEs
    • Policies and Initiatives taken by Government of India
    • ICT Value Chain
    • Financing Options
    • Way Forward
  • 3. Overview of the Indian MSMEs
    • In accordance with the provision of Micro, Small & Medium Enterprises Development (MSMED) Act, 2006 the Micro, Small and Medium Enterprises (MSME) are classified in two Classes :
  • 4. Definition of MSMEs The limit for investment in plant and machinery / equipment for manufacturing / service enterprises, as notified, vide S.O. 1642(E) dtd.29-09-2006 are as under :
  • 5. Investment Limits for service sector
  • 6. Some quick estimates
    • The number of enterprises is estimated to be about 26 million and these provide employment to an estimated 60 million persons
    • Of the 26 million MSMEs, only 1.5 million are in the registered segment while the remaining 24.5 million (94%) are in the unregistered segment
    • The state-wise distribution of MSMEs show that more than 55% of these enterprises are in 6 States, namely, Uttar Pradesh, Maharashtra, Tamil Nadu, West Bengal, Andhra Pradesh and Karnataka.
    Source: 4th All-India Census of MSMEs, for reference year 2006-07
  • 7. Some quick estimates (contd..)
    • About 7% of MSMEs are owned by women and more than 94% of the MSMEs are proprietorships or partnerships
    • MSMEs contribute 8 per cent of the country’s GDP, 45 per cent of the manufactured output and 40 per cent of our exports
    • The labour and capital ratio in MSMEs and the overall growth in the MSMEs are much higher than in the larger industries.
    Source: 4th All-India Census of MSMEs, for reference year 2006-07
  • 8. Opportunities for MSMEs in India
    • Opportunities provided by clustering approach:
    • Tirupur Garment Cluster
    • Ahmedabad Pharmaceutical Cluster
    • Chennai Leather Cluster
    • Railways
    • Defence
  • 9. Opportunities for MSMEs in India(contd..)
    • Automotive
    • Metallurgy
    • Dairy machinery
    • Industrial machinery and machine tools
    • Auto and auto ancillary
  • 10. Key challenges faced by Indian MSME sector
    • High cost of credit
    • Collateral requirements
    • Limited access to equity capital
    • Problems in supply to government departments and agencies
    • Procurement of raw materials at a competitive cost
    • Lack of access to global markets
  • 11. Key challenges faced by Indian MSME sector(contd..)
    • Inadequate infrastructure facilities, including power, water, roads, etc
    • Low technology levels and lack of access to modern technology
    • Lack of skilled manpower for manufacturing, services, marketing, etc
    • Absence of a suitable mechanism
    • Branding and Marketing
  • 12. Steps that can be taken to meet these challenges
    • Adopting new standards in technology, quality and pricing to be able to survive in the marketplace.
    • This sector is very seriously looking for ICT enablement
      • Restructuring
      • Building online presence as well as e-mail facilities.
      • E-Commerce and enterprise management solutions
  • 13. Creating competitive SMEs
  • 14. Major thrust areas for increasing competitiveness of MSMEs
    • Government has identified three major areas that contribute to competitiveness of MSMEs
    • Technology (including quality): ICT systems like ERP, HR & Information Systems, etc.
    • Skills development
    • Finance: MSMEs are beginning to move from a reliance on bank credit to a variety of other specialized financial services and options
  • 15. Measures taken for promoting emerging Financial Resources
    • Setting up of a separate trading exchange exclusively for the MSMEs
    • Provision of special incentives for encouraging larger flow of Venture Capital & Private Equity funds into the sector
    • More liberal “All-in-Cost Ceilings” for SMEs to raise low-cost funds through the External Commercial Borrowing route
    • Bringing legislation on ‘Factoring Services’.
  • 16. Policy Initiatives & Measures taken by the Indian Government
  • 17.
    • ‘ Udyami Helpline ’, the Call Centre of Ministry of Micro, Small and Medium Enterprises (MSME)
    • Vocational Training Centres (VTCs) in African countries under the Indo-Africa Forum Summit in 2008.
    • Proposed to link the ‘Charkhas Scheme’ of Khadi and Village Indutries Commission (KVIC) with the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA).
    • Enactment of the ‘ Micro, Small and Medium Enterprises Development Act, 2006’ .
    • National Manufacturing Competitiveness Program (NMCP)
    • Task Force to reflect on the concerns & issues regarding MSMEs and formulate an agenda for action.
  • 18. National Manufacturing Competitiveness Scheme (NMCP)
    • Nodal programme of the Government of India to develop global competitiveness among Indian MSMEs.
    • 10 components under the NMCP targeted at enhancing the entire value chain of the SME sector.
    • Programme is to be implemented through Public Private Partnership mode with close physical and financial participation of the MSME sector.
  • 19. Component Schemes of NMCP
    • Marketing Assistance/ Support to MSEs
    • Building Awareness on Intellectual Property Rights
    • Providing Support for Entrepreneurial and Managerial Development of MSMEs through Incubators
    • Enabling Manufacturing Sector to be Competitive through Quality Management Standards (QMS) and Quality Technology Tools (QTT)
    • Mini Tool Rooms under PPP mode
  • 20. Component Schemes of NMCP contd.
    • Lean Manufacturing Competitiveness Programme for MSMEs
    • Promotion of Information & Communication Tools (ICT)
    • Design Clinics Scheme for MSMEs
    • Marketing Assistance and Technology Upgradation Scheme for MSMEs
    • Technology and Quality Upgradation Support to MSMEs
  • 21. Task Force for MSMEs
    • It was set up by the Prime Minister in August 2009 to address the concerns and issues regarding MSMEs and formulate an agenda for action.
    • It classified the common issues into 6 major thematic areas into:
      • Credit
      • Marketing
      • Labour
      • Rehabilitation and exit policy
      • Infrastructure, technology and skill development
      • Taxation.
    • A separate Sub-Group was also constituted to look into the development of MSMEs in the North-East and Jammu & Kashmir.
  • 22. Recommendations by Task-Force
  • 23. ICT Value Chain
  • 24. Case: Bharath Beedi
    • Challenges for IT implementation
    • Simplification of highly transactional sales cycle.
    • Synchronization between production, logistics and transportation, warehousing, sales and distribution management.
    • Tracking market scenarios and easy monitoring of sales volume fluctuation
    • ROI on marketing campaign.
    • Reduction in duplication and ease communication flow across the sales and distribution network.
  • 25. Phases of Implementation
  • 26. Financing Options
    • Financing through Banks
    • Working Capital
    • Risk Capital
    • Rating SMEs
    • SME Exchange
    • Micro Credit
  • 27. Way forward…
    • Export lines for credit
    • Hedging for MSMEs