SMEBusiness

Inside This Issue

FROM THE CHAIRMAN’S DESK

Ramesh DatlaChairman,

CII National MSME Council

Journal of Small Business and Enterprise Vol 7, No. 4, July 2010

Focus pg6NeTworked pg8

roadmap pg9ceNsus pg10

INTervIew pg12ageNda pg14

INNovaTIoN pg15value chaIN pg18

plussmall world pg3

INTerNaTIoNal pg19eveNTs pg 23

The Indian MSME sector is at an inflection point, faced with the twin prospects of building its global com-petitiveness and bringing a large number of unor-

ganised players into the organised fold. The core strengths of this sector came to the fore in the face of the recent global economic meltdown when the majority of MSMEs in the country successfully realigned their businesses to tack-le the vagaries of shrinking markets. The time has come for us to consolidate and grow the sector.

I have the singular opportunity of catalysing this change in my role as Chairman of CII MSME Council. It gives me great pleasure to inform you, our esteemed readers, that CII presented to Mr Dinsha Patel, Minister of State (IC), MSME, Government of India, a 12-point agenda for the MSME sector. In this, we have focused attention on five key growth enablers - finance, regulatory framework, capacity building, environment and business development. In the coming days, we will step up our efforts to bring about changes in the existing policies and regulations so as to strengthen the enablers.

The Council will be constantly guided by the CII National Theme of Business for Livelihood - Education, Employabil-ity, Innovation and Entrepreneurship. At the same time, we will work closely with the Ministry of MSME for the im-plementation of the recommendations made by the High Level Task Force set up under the Principal Secretary in the Prime Minister's Office.

Our 12-point agenda will indeed be the cornerstone of our grand design for MSME development this year and be-yond. I shall briefly touch upon each agenda item. Keep-ing in view the growing importance of ICT in MSMEs, we have urged the Government to consider according 100% depreciation to MSMEs on investment in IT hardware / software for up to Rs 25 lakh per annum for a block of three financial years.

In addition, the Council has called for tax benefits to be extended to companies that source from MSMEs and ad-here to the payment schedule, promotion of climate-friend-

ly energy technologies and setting up a Central Climate Friendly Technology Fund to aid MSMEs, establishment of an SME exchange, formulation of a Purchase Preference Policy under Section 11 of the Micro, Small and Medium En-terprises Development (MSMED) Act, 2006, simplification of the regulatory framework for MSMEs, introduction of policy guidelines to encourage FDI by NRIs in the SME sector, re-vamping the MSME credit rating system, earmarking 15% for MSEs within the overall priority sector lending, extension of promotional schemes to all units graduating from 'Micro & Small' category to 'Medium' category, and enhancement of the MSME sector's linkages with the large industry.

The details that underpin the 12-point agenda have been captured in this edition of SME Business for your ref-erence. CII through its L M Thapar Centre for Competitive-ness for the SMEs will also develop 12 new clusters impact-ing some 100 MSMEs in all.

This edition has covered several other key develop-ments in the MSME sector. We have focused upon the opportunities and challenges for MSMEs in the textiles and apparels segment, role of design clinics in promoting MSME innovation, opportunities for India-UK and India-Czech Republic bilateral SME cooperation and the likely impact of the proposed national manufacturing and in-vestment zones on this sector.

In addition, we have featured a full-fledged interview with Mr Rakesh Rewari, DMD, SIDBI, wherein the different aspects of financing have been dealt with. I am sure you will read this interview article with great interest.

We have before us a year full of opportunities, and some challenges to boot. I invite you to pro-actively participate in the shaping of this journal and in the Council's activities.

Please write to me at Chairman.MSMECouncil@cii.in

RBI has extended the scheme of Interest Subvention of 2 percentage points from April 1, 2010 to March 31, 2011 on

pre and post shipment rupee export credit for four export sec-tors viz. Handicrafts, Carpets, Handlooms and Small & Medium Enterprises (SME), subject to the condition that banks will charge interest rate not exceeding BPLR minus 4.5 percentage points on pre-shipment credit up to 270 days and post-shipment credit up to 180 days on the outstanding amount for the period April 1, 2010 to March 31, 2011 to these sectors. However, the total subvention is subject to the condition that the interest rate, after subvention will not fall below 7 per cent, which is the rate appli-cable to the short term crop loan under priority sector lending.

However, with the change over to the Base Rate System, the interest rates applicable for all tenors of rupee export credit ad-vances with effect from July 1, 2010 will be at or above Base Rate in respect of all fresh/renewed advances. Accordingly, banks may reduce the interest rate chargeable to the exporters as per the Base Rate System in the above mentioned sectors by the amount of subvention available. If, as a consequence, the interest rate charged to exporters goes below the Base Rate, such lending will not be construed to be violative of the Base Rate guidelines.

The CII MSME survey ranks infrastructure development the most important factor, as revealed by 81% of MSME re-

spondents, followed by simplification of labour laws, as revealed by 75% of the MSME respondents. Promotion of innovations and cutting edge technology takes next position, as revealed by 58% of the MSME respondents.

The Survey ranks high cost of credit to be most important im-pediment to growth as revealed by 79% of the MSME respondents, followed by procurement of raw material at a competitive cost as revealed by 64% of MSMEs and delayed payment along with lack of availability of credit, as revealed by 55% of MSME respondents.

As regard the approved components of National Manufacturing Competitiveness Programmes (NMCP) schemes, 70-75% of MSME respondents are aware of these schemes, but 60-70% of MSME respondents are not availing the benefits, while only 5-10 % of MSME respondents are availing the benefits of NMCP schemes.

According to Survey, 47% of MSME respondents are registered under MSMED Act 2006, 30% of MSMEs respondents reported that they have not registered their enterprise under this Act, 9% of MSMEs respondents reported that they are not aware of the Act while 14% MSMEs said that registration under the MSMED Act 2006 is not required for their enterprise.

as and when required.To give banks some time to stabilise the

system of Base Rate calculation, banks are permitted to change the benchmark and methodology until end-December 2010. The actual lending rates charged may be transparent and consistent and be made available for supervisory review/scru-tiny, as and when required. The Base Rate could also serve as the reference bench-mark rate for floating rate loan products, apart from external market benchmark rates. The floating interest rate based on external benchmarks should, however, be equal to or above the Base Rate at the time of sanction or renewal.

RBI has replaced the benchmark prime lending rate (BPLR) system

with the base rate system with effect from July 1, 2010. The Base Rate system is aimed at enhancing transparency in lending rates of banks and enabling better assessment of transmission of monetary policy and shall include all those elements of the lending rates that are common across all catego-ries of borrowers. Banks may choose any benchmark to arrive at the Base Rate for a specific tenor that may be disclosed trans-parently. Also, banks are free to use any other methodology, as considered appro-priate, provided it is consistent and is made available for supervisory review/scrutiny,

The DIPP has agreed to support CII in setting up five IPR Facilitation Cells. A formal sanction for this is expected soon. The Ministry of MSME has sanctioned

to CII the establishment of two IP Facilitation Cells (IPFCs) at Indore and Mysore (ei-ther inside CII office or outside) with a financial sanction of Rs 63 lakh for each centre (total Rs 126 lakh) over 3 years. The first year's grant of Rs 44 lakh (Rs 22 lakh for each centre) is already received. CII will provide office space, utility services, etc. The centres will earn enough money to cover this cost.

RBI extends interest subvention

Infrastructure key to growth: CII MSME Survey

Two German industry bodies have tied up

with five Indian MSME repre-sentative agencies to usher in professionalism and expertise in their management, and im-prove their access to services. The partnership programme will be implemented jointly by ZDH (the German Confedera-tion of Skilled Craft) and SEQUA, which is a non-profit subsidiary of Germany's top four business associations. The Indian MSME partners include the Indian In-dustries Association (IIA), the Federation of Madhya Pradesh Chamber of Commerce and Industry, the Gujarat Chamber of Commerce and Industry, the Mohali Industries Association (Punjab) and the Faridabad Small Industries Association (Haryana).

German body ties up with MSME agencies

RBI replaces BPLR with base rate

IPR Facilitation Cell

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CII Tamil Nadu & Chief Financial Of-ficer, TAFE Ltd, said that increase in competition and demand for quality at best prices prompted the SMEs to introduce new product development methods with modern technology. It is important to bridge the gap between SMEs and equity investors, including private equity funds, which have re-cently grown in India, said Mr Bruno Valanzuolo, Chief Technical Advisor of the Consolidated Project, UNIDO.

A one-day workshop organised jointly by the Confederation of

Indian Industry (CII) in collaboration with United Nations Industrial Devel-opment Organization (UNIDO), Indian Venture Capital Association (IVCA) and Indian Angel Network (IAN) has recommended alternative finance options for small and medium enter-prises (SMEs). Speaking on the occa-sion, Mr S Chandramohan, Convenor, Panel on Economic Affairs & Taxation,

CII, UNIDO call for alternative finance options

Micro sector to get 60% of bank credit to

MSMEs

Energy efficiency plan for Gujarat SMEs

The Reserve Bank of India (RBI) has asked banks to ear-

mark 60% of their total advances to the MSMEs to micro industries and target a 20% year-on-year growth in MSE credit, in order to ensure enhanced credit flow to the sector. Banks have to achieve the 60% target in stages, viz, 50% in the year 2010-11, 55% in the year 2011-12 and 60% in the year 2012-13. The RBI advise to the banks is in line with the recommendations of the Prime Minister's Task Force on Micro, Small and Medium En-terprises. As per the Task Force recommendations, banks should ensure that (i) 40% of the total ad-vances to MSE sector goes to micro (manufacturing) enterprises having investment in plant and machinery up to Rs5 lakh and micro (service) enterprises having investment in equipment up to Rs 2 lakh; (ii) 20% of the total advances to MSE sector goes to micro (manufacturing) en-terprises with investment in plant and machinery above Rs 5 lakh and up to Rs 25 lakh, and micro (ser-vice) enterprises with investment in equipment above Rs 2 lakh and up to Rs 10 lakh.

SME clusters through knowledge sharing, capacity building and development of in-novative financing mechanisms. The textile cluster in Surat - one of the prime clusters in Gujarat famous for synthetic sarees and dress materials - has about 400 industries for dyeing of synthetic and cotton cloth. The annual electricity consumption of this cluster is about 726 GWh. The annual gas consumption is 315 million SCM and 2.3 million tons of coal is used, which accounts for nearly 1.2 million tons of oil equivalent of energy use. The overall energy saving potential in the cluster is about 1.5 lakh tons of oil equivalents, which is 13 per cent of its total power consumption.

The Bureau of Energy Efficiency (BEE), under the aegis of the Minis-

try of Power, has started the implementa-tion of its Energy Efficiency Programme for SMEs in Gujarat and it has identified six SME clusters in the state, which include Surat (textiles), Jamnagar (brass), Morbi (ceram-ics), Ahmedabad (chemicals), Vapi (dyes and chemicals) and Gujarat dairy clusters. As part of the initiative, Mr Bharatsinh So-lanki, Union Minister of State for Power, has inaugurated the Information Dissemi-nation Workshop in the Surat textile clus-ter. The objective of the programme is to accelerate the adoption of energy efficient technologies and practices in the chosen

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ernment provides direct catalytic support to the units in the form of capital subsidy, lower tension power tariff subsidy, employ-ment intensive, environment friendly tech-nology subsidy etc. This year the state gov-ernment has proposed to more than double the subsidy outgo to Rs 100 crore to give a fillip to the growth of units and entrepre-neurship development.

By March 2012, all villages with a population of over 2,000 will have banking services and by 2015 all villages should have banking services

and all households bank accounts, RBI deputy governor Mr K C Chakrabarty has been quoted saying. Releasing the India Micro, Small and Medium Enterprise Report 2010, he has said India has over six lakh villages. Even after 40 years of nationalisation of banks, only 35,000 villages have access to banking services. We have a large-scale financial exclusion. MSMEs need to be made a part of integrated planned growth, Mr Chakrabarty said. This has not happened for the last 40 years owing to lack of technology, he said, and added the MSMEs should also bring in appropriate cost effective technologies. The state governments and NGOs must act together and ensure that those who require help get the help.

Tamil Nadu Government has eased the capital subsidy scheme under

its MSME policy 2008 to cover services and business facilitation along with manufactur-ing activities. State additional chief secretary, MSME department, Mr P Selvam told media that necessary orders have been issued to extend the scope of the scheme to cover services and business facilitation. The Gov-

In recognition of the need for making finance available to SMEs, SEBI has decided to encourage promotion of dedicated exchanges and/or dedicated platforms of the ex-

changes for listing and trading of securities issued by SMEs. Consequently, SEBI amended SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009 by inserting a Chapter XA on Issue of specified securities by small and medium enterprises, through notification dated April 13, 2010. In continuation of the same and to facilitate listing of specified securities in the SME exchange, Model Equity Listing Agreement to be executed between the issuer and the Stock Exchange, to list/migrate the specified securities on SME Exchange, has been specified. All Stock Exchanges are advised to: (i) execute the Listing Agreement with the issuing companies in line with the Model Listing agreement specified in the Annexure, without limiting or diluting any of the requirements thereof; (ii) make necessary and consequential amendments, if any , to their bye-laws for the implementation of the above decision; (iii) disseminate the same on their web-site for easy access to the Issuers and investors; and (iv) communicate to SEBI, the status of the implementation of the provisions of this circular in the Monthly Development Report.

Banking to cover all villages with 2,000+ people

Small and medium units in the country contributed 40% of fresh

jobs after the economy started recovering, a study said. During the global economic slowdown, the country's SMEs had laid off about one-fourth of its workforce, the study said. "It has been one of the fastest to tide over the gloom (global economic slowdown). This sector alone contributed almost 40% of all jobs created in the economy thereafter," the study observed. The MSME sector plays a crucial role in the country's economy contributing 45% to in-dustrial output and 40% to exports. There are about 26 million such enterprises em-ploying about 60 million people.

The National Small Industries Cor-poration (NSIC) has launched a

marketing intelligence cell for MSME. The setting up of the cell is in line with rec-ommendation of the task force on MSME set up by the Prime Minister, Dr Manmo-han Singh. The cell will collect and dis-seminate information on domestic and international marketing in coordination with the Ministry of Commerce and the export promotion councils and agencies. The NSIC marketing intelligence cell will provide proper guidance and support to MSMEs to locate great opportunities in the inter-connected globalised markets. Earlier, the task force headed by the Prime Minister's Principal Secretary, T K A Nair, has recommended an equity infusion of Rs 300 crore into NSIC for strengthening its marketing activities.

SMEs create 40% of new jobs

NSIC launches marketing intelligence

TN eases capital subsidy scheme

SME Exchange listing

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Textiles & Garments: Weaving Intricate Growth Designs

India textile industry plays a major role in the economy of the country. At present, this industry's size is esti-mated to be around $52 billion and is also projected to be around $115 bil-

lion by the year 2012. The domestic market for textiles is expected to scale $60 billion by 2012.

Further, the industry also contributes nearly 14% of the total industrial produc-tion of the country. It contributes around 3% to the GDP of the country. Indian textile industry is also the largest in the country in terms of employment generation. It not only generates jobs in its own industry, but also opens up opportunities for other ancillary sectors. The industry currently generates employment for more than 35 million people. It is also estimated that the industry will generate 12 million new jobs by the end of the year 2010-11.

With direct linkages to the rural econo-my and the agriculture sector, it has been estimated that one of every six households in the country depends on this sector, ei-ther directly or indirectly, for their liveli-hood. However, the industry is dominated by small, fragmented and non-integrated units with the exception of the spinning sector.

MSME Intensive SectorThe textile industry is among the MSME intensive sectors in India, largely an outcome of government policies dur-ing the early years following Indepen-dence. Focusing on promoting domes-tic employment, large-scale production in the textile industry was curtailed by restrictions on total capacity and level of mechanisation. Several textile items were reserved for the small scale seg-

ment. These policies promoted the ex-tensive growth of small scale textile enterprises that were highly labour intensive.These policiesÐpursued from the 1950s to the 1970sÐresulted in the domi-nance of the decentralised powerloom and handloom sectors in the textile in-dustry, which are mainly small and me-dium scale enterprises (SMEs). Statis-tics released by the Ministry of Textiles show a highly fragmented industry, ex-cept in the spinning sub-segment. The organised sector accounts for over 95% of spinning, but hardly 5% of weaving fabric activities. Small Scale Industries (SSIs) perform the bulk of the weaving and processing operations.

The predominance of the MSMEs can also be seen in the entire supply chain of the textile industry cotton ginning and processing, weaving, processing and apparel manufacturing. The SMEs in these sectors are located in identifi-able clusters across the country.

Cluster-based DevelopmentInternational experience has proved that adopting a cluster-based devel-opment approach of the textile MSME segment has helped firms in attaining competitiveness, requisite in today's new market.The Government of India's cluster de-velopment initiatives, involving techni-cal assistance, subsidies for technology upgradation and marketing support,

With direct linkages to the rural economy and the agriculture sector, the textiles industry impacts one of every six households in the country, either directly or indirectly, in terms of livelihood.

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have strengthened the competitive-ness of the MSMEs in this sector, which has also consolidated their position in the global value chain. A case in point is the initiative undertaken by the Min-istry of Textiles, with a cluster-based programme for capacity building in textile and clothing SMEs across 20 clusters in the country.

Besides, the government had also undertaken a series of progressive measures like introduction of Technol-ogy Mission on Cotton (TMC), Technol-ogy Upgradation Fund Scheme (TUFS), Scheme for Integrated Textile Park (SITP), reduction in customs duty on import of state-of-the-art machinery, Debt Restructuring Scheme, setting up of Apparel Training and Design Centres (ATDCs), 100% FDI in the textile sector under automatic route, setting up of Na-tional Institute of Fashion Technology (NIFT), etc., for upgrading and strength-ening the textile sector in India.

Key ChallengesThe Working Group on Textiles & Jute Industry for the 11th Five Year Plan (2007-2012) has studied the major prob-lems being faced by the textile industry which include: structural weaknesses in weaving and processing, fragmented and technologically backward textile processing sector, fragmented garment industry, rigid labour laws, inadequate capacity of the domestic textile machin-ery manufacturing sector, inadequate training facilities in textile sector, and infrastructural bottlenecks in terms of power, utility, road transport etc.

However, there is a massive gap be-tween the availability of skilled man-power and the requirements of the industry, particularly in the weaving, dying, processing and garment seg-ments. To bridge this gap requires massive expansion and modernisa-tion of training institutes/polytechnics

sure the flow of investment in crucial areas for the growth of the sector. The coordination among units needs to be strengthened in order to develop unhin-dered growth of value added products. Besides, from time to time, in consulta-tion with all stakeholders, the Govern-ment needs to modify these schemes so as to achieve better results through im-proved delivery of programmes. These progressive measures have helped the textile sector to achieve improved growth in production; enhanced pro-ductivity and a larger share of textile export market in the world.

On a larger plan, CII has also put forth recommendations for the growth of the textiles industry, which are as follows:l MSP to be brought back to reflect international price levels.l Do away with incentives for cotton exports.l Explore extending the NREGA for textiles.l Rationalisation of power tariff across the country.l Additional Duty Draw Back and DEPB rates to ensure all state levies are re-bated. l CENVAT Accumulation to be refund-ed in cash.l Promote FDI in the textiles and Ap-parels sector.

Thrust on exports is also integral to the textile MSMEs growth prospects. This would call for stepping up textile exports not just to the traditional US and Europe-an markets but also to other major mar-kets around the world. At the same time, the garments industry would be called upon to leverage the opportunities that the Indian rural markets present. Along with productivity, the industry would be better served by focusing upon green technologies and use of green energy in its production processes, which can be optimised in the industrial clusters.

across the country.The number of ITIs, targeted specifi-

cally to the requirements of the textiles sector, need to be increased signifi-cantly to meet the shortage of opera-tives. They may be persuaded to relate their courses and curriculum in tex-tiles with the inputs from the textiles industry to make them more relevant to modern machineries and processes used in textiles industry.

To mitigate the skill gaps of labour at the lower end, the government should open training schools on a massive scale. This should be on a public-pri-vate partnership (PPP) module so that it can run on a sustainable basis.

Apart from the fact that the inflexi-bility in labour laws is eroding the com-petitiveness of the industry, it has also affected the expansion of garments sector. Outdated labour laws have in-duced inflexibility in the clothing in-dustry, leading both to fragmented op-erations in order to circumvent these laws and loss of export orders due to industry's hesitation over expanding when there is an upsurge.

Besides, the Indian textile Industry had been plagued by obsolescence, la-bour problems, raw material vagaries and lack of modernisation including that of spindles. The post-fabric stage processing technology has also been lagging but is now coming up fast with infusion of textile processing technology. Small scale firms perform the majority of weaving and processing operations. The level of weaving technology is of lower order and knitting units don't possess ca-pacity to perform dyeing, processing and finishing to international standards.

Conclusion From an MSME perspective, Indian textiles and clothing industry is at the crossroads. The role of government in these circumstances should be to en-

"The textile sector in India and its health is of critical importance to our county. The employment opportunities that it provides are significant pillars on which the dreams of inclusive growth rests. The pillar is under severe challenge today and needs very special attention from the Government on multiple fronts, if it is to be resurgent and viable in the medium to long term."

Mr S Rajagopal, Co-Chairman, CII National MSME Council

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Cloud Computing: Leveraging ICT

Micro, small and medium enterprises (MSMEs) play a key role in national eco-nomic development by facilitating flows of infor-

mation, capital, ideas, people and prod-ucts. These contributions can further be enhanced and strengthened through the use of information and communication technologies (ICT) that are increasingly transforming modern businesses by en-abling the rapid, reliable and efficient ex-change of large amounts of information. Access to and the use of ICT by MSMEs, particularly as a collective sector, will lead to greater job creation, increased public revenue and a general rise in the standard of living.

The potential benefits of ICT to MSMEs are well known. ICT enhance MSME efficiency, re-duce costs, and broaden market reach, both locally and globally. Since the MSME sector plays a major role in national economies, these benefits to individual MSMEs collective-ly translate into positive results in the form of job creation, revenue generation and overall country competitiveness.

The immense impact of MSME fortunes or failures on the economy makes it criti-cal for MSMEs to be prepared for and take full advantage of any benefits offered by ICT. ICT will increasingly empower MSMEs to participate in the knowledge economy by facilitating connectivity; helping to cre-ate and deliver products and services on a global scale, and providing access to new

markets and new sources of competitive advantage to boost income growth with a competitive price.

Cost Factor & Availability While it may be easy to reach a consen-sus on the point that ICT are beneficial to MSMEs, and to a country's overall eco-nomic well-being, several barriers hinder its use by MSMEs. For instance, MSMEs themselves may not see the relevance or suitability of ICT to their businesses. In many instances, they may find it more difficult, relative to larger firms, to find an e-business case applicable to them because of lack of time, information and knowledge.

Moreover, MSMEs often lack the human and financial resources needed for ICT and e-commerce. They have to focus on day-to-day operations, and lack the time and extra resources necessary to understand the benefits of new technologies. MSMEs are generally concerned about the costs of establishing and maintaining e-commerce systems since they often suffer from bud-get constraints and are less sure of the ex-pected returns on such investments.

The availability of reliable Internet con-nections and other communications ser-vices, preferably broadband at competitive prices, also affects the inclination of MSMEs to adopt ICT.

Other related barriers include payment uncertainties and contract, delivery and guarantee uncertainties. Privacy and legal

protection for Internet purchases are also significant concerns, both for businesses and customers alike.

Cloud ComputingCloud computing allow MSMEs to rent appli-cations for short-term use without investing in servers, software or other infrastructure. MSMEs can also pay for temporary access to computing resources, such as, data centres in other countries, for example without ink-ing long-term contracts.

As such, cloud computing has three distinct characteristics that differentiate it from traditional hosting. It is sold on de-mand, typically by the minute or the hour; it is elastic -- a user can have as much or as little of a service as they want at any given time; and the service is fully managed by the provider (the consumer needs nothing but a personal computer and Internet ac-cess). Significant innovations in virtualisa-tion and distributed computing, as well as improved access to high-speed Internet and a weak economy, have accelerated interest in cloud computing.

Cloud computing can also come in handy when MSMEs are trying to build a new ap-plication or business process. MSMEs can get started right away on a new project without needing to wait for servers to be-come available on the existing network. Cloud computing can be implemented ei-ther privately or publicly as well as in con-junction with existing networks in a vast range of hybrid configurations.

Cloud computing allow MSMEs to rent applications for short-term use without investing in servers, software or other infrastructure. MSMEs can also pay for temporary access to computing resources.

"ICT application is very important. For any entrepreneur has to balance between ICT application, expansion and energy efficient solutions. The ICT scheme, which was recently launched by the gov-ernment, has finalised a total budget of Rs 105 crore out of which government spending would be Rs 46 crore."

Dinesh Rai, Secretary, Ministry of MSME, Government of India

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Following a meeting with state ministers and secretaries, the MSME ministry has decided to set up three groups for (i) Revamping of District Industries, (ii) Rehabilitation of Sick MSMEs and (iii) Infrastructural Issues in view of the Task Force recommendations.

MSME Growth: State of Affairs

The recommendations put forth by the Prime Minister's Task-force on MSMEs are being wide-ly discussed before an action plan is drawn. As part of the

exercise, Mr Dinsha Patel, Minister of State (Independent Charge) for Micro, Small & Medium Enterprises (MSME), himself pre-sided over a day long interactive meeting with the state ministers and secretaries (In-dustries/MSME) on May 11 in New Delhi to deliberate over the recommendations and come up with action plans.

Based on the discussion, it has been decided to set up three groups for (i) Revamping of District Industries, (ii) Re-habilitation of Sick MSMEs and (iii) Infra-structural Issues in view of the Task Force recommendations.

The Report of the Task Force has already been circulated to the state/UT governments for implementation of the recommendations in a time-bound manner. The Task Force in its Report has made several recommenda-tions that are important for providing an impetus to the growth of the sector, and to enable them to achieve its true potential in terms of employment generation. In this endeavour, the state/UT governments have been given a major role as some of the rec-ommendations require active support of the state governments to get implemented.

It has been communicated to the state governments that the Centre is committed to the growth of the MSME sector. "While our Ministry is making all out efforts to promote and develop this sector, we cannot succeed without the support and cooperation of the States/UTs and other stakeholders. We regard you as our very valuable partners and in fact most of our schemes are implemented through your

efforts. In addition to implementation of the schemes, we also get your support in suggestions for policy making. This part-nership has gone a long way in promot-ing the growth and development of MSME sector," Mr Patel said.

The MSME sector acts as a breeding ground of entrepreneurship, often driven by individual creativity and innovation. The sector contributes 8% of the country's GDP, 45% of the manufactured output and 40% of total exports. The MSMEs provide employment to about 60 million persons through 26 million enterprises. The em-ployment potential as well as the overall growth in the MSME sector is much higher than in the large industries. Besides, the sector has been consistently register-ing higher growth rates than the overall manufacturing sector, thus demonstrating high degree of resilience and adaptabil-ity. "The spatial distribution of the MSMEs is also more even. Thus, MSMEs assume great significance for meeting the national objectives of growth with equity and inclu-sion," Mr Patel said.

The role of the state government is far more important than the role of the Centre in promoting the growth of the MSME sector. This was stated by Mr T K

A Nair, Principal Secretary to Prime Min-ister, in the meeting. The Task Force was constituted under Mr Nair in September 2009 to reflect on the issues raised by the industry associations and formulate an agenda for action after discussions with all stakeholders. He said that state governments know that whatever be the schemes and programmes, which are softly implemented by the Govern-ment of India, ultimately the success of those depend upon the extent to which the state governments get themselves involved and very actively promote, and also very actively engage themselves in the implementation of those schemes.

The report has classified the common issues into six major thematic areas and constituted separate sub-groups for de-tailed examination. These thematic areas covered credit, marketing, labour, rehabili-tation and exit policy, infrastructure, tech-nology and skill development and taxation. A separate sub-group has been constituted to look into the development of MSMEs in the North-East and Jammu & Kashmir. The Task Force also examined the recommen-dations made by earlier committees/study groups that had been set up to look into the issues relating to MSMEs.

"The MSME sector has been consistently registering higher growth rates than the overall manufacturing sector, thus demonstrating a high degree of resilience and adaptability. The sector assumes great significance for meeting the national objectives of growth with equity and inclusion."

Mr Dinsha Patel, Minister of State (IC), Micro, Small & Medium Enterprises, Government of India

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The quick results of 4th All India Census of MSMEs provide clear-cut indicants for planning the growth and development of the sector

Window To The Future

SMEs make up the backbone of the national economy, employ-ing 60 million people and ac-counting for 45% of the manu-facturing output and 40% of

exports. Unlike large enterprises, SMEs have the inherent capability to use resourc-es efficiently and satisfy local needs.

The quick results of 4th All India Census of MSMEs (2006-07) reveal that there were 2.61 crore MSMEs in 2006-07 (as against the pro-jected figure of 1.3 crore). This includes 0.15 crore registered units and 2.46 crore un-reg-istered units. Of the total, 28% are in manu-facturing and 72% in services. These units are largely in apparel (14.03%) followed by food products and beverages (13.53%) and main-tenance of personal and household goods (9.25%). The MSME sector accounts for em-ployment of 5.97 crore persons, of which 0.95 crore are in registered units and 5.03 crore in the un-registered units.

The data on registered units reveals that closure among MSMEs has decreased from 39% in 2001-02 to 21.64% in 2006-07. Sick-ness in MSMEs has increased marginally from 13.98% in 2001-02 to 14.47% in 2006-07.

Sickness is found to be largely on account of lack of demand and shortage of working capi-tal. The data also reveals that the per unit em-ployment has increased from 4.48 in 2001-02 to 6.24 in 2006-07, per unit fixed investment from Rs 6.68 lakh to Rs 33.78 lakh and per unit

gross output from Rs 14.78 lakh to Rs 46.13 lakh in order of priority.

This is the first Census after change in defi-nition of the sector and includes, for the first time, medium enterprises and services are being covered. For purposes of the Census, an enterprise is defined as a unit with fixed prem-ises and hence does not include hawkers, road side vendors, etc.

The 3rd All-India Census of Small Scale Industries with reference year 2001-02 was completed in the year 2003. The 4th All-India Census of MSMEs was launched in May 2008 and its field work was com-pleted in March 2009. This required collec-tion of data for 24 lakh registered units and around 4 lakh unregistered units.

Statistics pertaining to the sector play an important role for policy formulation on credit, marketing, technology, entrepreneur develop-ment and infrastructure development. The findings of the Census will have utility for plan-ners, administrators, academics, industrialists, entrepreneurs and all other stakeholders in the promotion and development of MSMEs.

It is perceived that the data will help MSMEs to rise above the constraints posed by a dif-ficult external and operational environment. If MSMEs are to emerge as growth engines of the economy, they should be provided with a conducive and enabling investment climate for the orderly conduct of business. This would imply provision of adequate and timely credit

at cost-effective rates, supportive infrastruc-ture, facilitation of technology transfer, train-ing in skill development, marketing support and reduced rigours of legislation and over-governance.

Take, for instance, credit availability. The MSME sector faces a huge shortage of credit. This limits ability to obtain working capital, machinery, equipment and raw materials, technology upgradation and finance for mar-keting. Banks should also set aside at least 15% of the 40% priority sector lending for SMEs. Further, there is a need to encourage MSMEs to explore alternative sources of finance such as venture capital investment, angel funds and other innovative sources of finance.

Second, urgent technological upgradation is needed for MSMEs to enhance their cost competitiveness and product quality. As sup-pliers to large industries, MSMEs have to attain technological standards demanded of them by large units. Hence, partnership between MSMEs and government agencies/R&D insti-tutions as well as the creation of technology incubation centres by the government from which units can source technology at cost-ef-fective rates can help in modernising MSMEs.

Empowering MSMEs would also mean giving them the freedom of entry and exit. Besides, these enterprises should be incen-tivised to work towards capacity-building. Policies should be so aligned to help units to grow from micro to medium scale and then to large scale. It is in this context that the corporatisation of SMEs assumes significance. For this, greater awareness should be created about the Limited Liabil-ity Partnership Act, which has paved the way for SME corporatisation.

The quick results are based on a census of all registered units conducted by the Office of DC (MSME) and Economic Census of un-reg-istered units conducted by Central Statistical Organisation. The Sample Survey of unregis-tered units by the Office of DC (MSME) is under way and is expected to be completed shortly. This will provide complete information on the MSME sector.

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MSME Census (2006-07) Ð At a Glanceeconomic parameters registered unregistered Total

Total No. of enterprisesmanufacturing enterprisesservice enterprises

15.53% (5.94%)10.35 (66.67%)5.18 (33.33%)

245.48 (94.06%)64.18 (26.15%)181.30 (73.85%)

261.01 (100.0%)74.53 (28.56%)

186.48 (71.44%)

No. of rural enterprises 7.05 (45.38%) 128.08 (52.18%) 135.13 (51.77%)

No. of women enterprises 2.15 (13.85%) 17.05 (6.95%) 19.20 (7.36%)

No. of enterprises managed by women 1.57 (10.10%) N.a. N.a.

enterprises by Type of operation:perennialNon-perennialNon-reportedTotal

14.83 (98.51%)0.70 (4.49%)

Nil15.53 (100.0%)

235.22 (95.82%)7.76 (3.16%)2.50 (1.02%)

245.48 (100.0%)

250.05 (95.80%)8.46 (3.24%)2.50 (0.96%)

261.01 (100.0%)

employmentmanufacturing enterprisesservices enterprisesTotal

79.85 (86.75%)12.19 (13.25%)

92.04 (16.62%)

224.22 (44.62%)278.35 (55.38%)502.57 (83.38%)

304.07 (51.14%)290.54 (48.86%)594.61 (100.0&)

employment by male / FemalemaleFemaleTotal

73.40 (79.74%)18.64 (20.26%)92.04 (15.86%)

412.75 (82.13%)89.82 (17.87%)

502.57 (84.14%)

486.15 (81.76%)108.46 (18.24%)594.61 (100.0%)

enterprises by main source of powerNo power neededcoaloillpg / cNgelectricityothersTotal

3.84 (24.72%)0.25 (1.58%)0.54 (3.48%)0.07 (0.42%)

10.31 (66.44%)0.52 (3.36%)15.53 (5.94%)

181.96 (74.12%)6.04 (2.46%)5.89 (2.40%)3.78 (1.54%)

28.14 (11.46%)19.68 (8.02%)

245.48 (94.06%)

185.80 (71.12%)6.28 (2.41%)6.43 (2.47%)3.84 (1.47%)

38.46 (14.73%)20.20 (7.74%)

261.01 (100.0%)

enterprises by Type of organisationproprietarypartnershippvt ltd companypublic ltd companycooperativesothers Total

14.22 (91.57%)0.63 (4.08%)0.30 (1.94%)0.07 (0.47%)0.50 (0.30%)0.26 (1.65%)

15.53 95.94%)

232.41 (94.67%)1.15 (0.47%)1.07 (0.43%)0.66 (0.27%)1.29 (0.53%)8.90 (3.63%)

245.48 (94.06%)

246.63 (94.49%)1.78 (0.68%)1.37 (0.52%)0.73 (0.28%)1.34 (0.51%)9.16 (3.51%)

261.01 (100.0%)

enterprises by social categoryscsToBcotherssocietyNot respondedTotal

1.20 (7.73%)0.47 (3.03%)6.01 (38.70%)7.85 (50.54%)

0.00.0

15.53 (5.94%)

19.38 (7.89%)7.82 (3.18%)

98.96 (40.31%)106.73 (43.48%)

9.39 (3.82%)3.21 (1.31%)

245.48 (94.06%)

20.58 (7.88%)8.29 (3.18%)

104.97 (40.22%)114.57 (43.90%)

9.39 (3.60%)3.21 (1.23%)

261.01 (100%)

enterprise by source of Finance:No Finance / self FinanceFinance Through Institutional sourcesFinance Through Non-Institutional sourcessources Total

13.63 (87.77%)1.74 (11.21%)

0.16 (1.02%)15.53 (5.94%)

228.51 (93.08%)11.77 (4.80%)

5.20 (2.12%)15.53 (94.06%)

242.13 (92.77%)13.51 (5.18%)

5.36 (2.05%)261.01 (100%)

(in lakh nos.)

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‘Our thrust will be on sustainable financing’

How do you see the evolving role of SIDBI for the development of India's MSMEs?SIDBI, set up in April 1990 as the prin-cipal financial institution for MSMEs, has witnessed many milestones and achievements during the last 20 years. Primarily being a refinancing institution, SIDBI has evolved into a conglomerate financial institution by offering direct credit, micro-finance, risk capital, various promotional and developmental support as well as of-fering a bouquet of services, such as, credit guarantee, venture capital, credit rating, technology matching and also facilitates reconstruction of NPAs in the MSME sector.

Our thrust will be on sustainable financing, which is now a commit-ment, as well as an integral part of SIDBI's business strategy to promote energy efficiency, environment pro-tection and social standards in the MSME sector. SIDBI will continue to play a strong enabling role for India's MSMEs, through a proactive and dy-namic approach to match the needs and demands of this vibrant sector. Our vision is that no bankable project in the MSME sector should languish for want of resources. Further, SIDBI will have special focus on micro-fi-nance support to unserved and un-derserved states of the country.

How do you see the future de-velopment of the MSME sector in light of the recommendations by the Task Force on MSMEs (con-stituted under the Chairmanship of the Principal Secretary to the Prime Minister)?

Prime Minister's Task Force has pro-vided a comprehensive framework for long term development of MSMEs, cov-ering many of the crucial aspects that predicate the sector's development. The time-bound recommendations made by the Task Force addressed a number of issues pertinent to the sec-tor, including bolstering the flow of credit, developing policy and institu-tional support for rehabilitation of sick units, developing insolvency laws and taxation specific to the sector, labour issues, marketing, infrastructure, skill development and technology.

On the whole, the Task Force has addressed pressing needs of India's MSME sector and presented a road-map for all stakeholders working for the sector to coordinate their activi-ties cohesively towards holistic devel-opment of the MSME sector.

SIDBI has recently held its Annu-al General Meeting. Can you tell us something on the achievement of SIDBI during FY 2009-10?We are happy to announce that SIDBI recorded its highest ever sanctions (Rs 35,521 crore) and disbursements (Rs 31,918 crore) during FY2009-10, with substantial increase in its indi-rect as well as direct lending. The to-tal income of the bank for FY2009-10 also showed an impressive growth of 21% and reached an all time high of Rs 3,207 crore. SIDBI's profits recorded an increase of more than 41% to Rs 421 crore. Earnings per share record-ed improvement to Rs 9.36. The bank has declared its highest ever dividend of 25% for FY2009-10.

Our passion for financial inclusion

is reflected in the growth of micro-finance assistance by 78% during the year registering Rs 3,812 crore as on March 31, 2010. The micro-finance assistance has reached out to more than 340 lakh persons through more than 150 MFI partners who are mostly women in the rural sector.

In addition, our bank has taken a number of environment-friendly ini-tiatives, prominent among them be-ing assistance to Mumbai taxi own-ers to replace their old taxis with CNG-fitted taxis, financing of LPG autorickshaws in Chandigarh through the refinance route. SIDBI has also supported SME Rating Agency of In-dia Ltd to come out with Green Rating of MSMEs for the first time in India. Besides, it has entered into MoU with Bureau of Energy Efficiency (BEE) to implement energy efficiency in the 25 MSME clusters.

Year 2009-10 also witnessed the bank being conferred with awards for its ac-tivities. SIDBI achieved Merit Award for its MSME Financing & Development Proj-ect (MSMEFDP) and Special Award in the category of Best in Membership Recruit-ment by the Association of Development Financing Institutions in Asia and the Pacific (ADFIAP) with membership of 116 institutions from 42 countries.

Establishment of SME Exchange appears to be a priority for fa-cilitating the raising of equity finance for the MSMEs. How does SIDBI view this initiative?There is a need to have a specialised stock exchange/platform for SMEs keep-ing in view their organisation structure and small equity requirements to be

mr rakesh rewari, deputy managing director, sIdBI shares the bank’sview on MSME development & financing in an exclusive interview. Excerpts:

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raised from the market initially. SEBI has recently released guidelines on SME Exchange with suitable norms for SMEs to provide easier access, safeguarding the investor's interests and also ensure liquidity in the proposed exchange.

The creation of an SME exchange in India will be an important step en-abling our MSMEs to mobilise equity, which can be leveraged to borrow more from the banks/FIs. Efficient capital markets for SMEs will also fa-cilitate exit to private venture capital invested in early stage companies. At the same time, the potential is-sues of such an SME exchange need to be given due attention. These is-sues could be building the investor confidence, protecting investors in-terests and maintaining liquidity. An efficient SME exchange can contrib-ute significantly to meet the aspira-tions of Indian SMEs and boosting in-novation and growth.

What steps would you recommend to enhance the credit-worthiness of a larger number of MSMEs in the country? The first and foremost action that the MSMEs should take for enhancing their credit worthiness is to go for credit rating. An independent third-party rat-ing will bring out transparency in the accounts and book keeping of MSMEs and also enhance the comfort level of bankers leading to greater credit flow to the MSME sector.

How well has the Credit Guar-antee Fund Trust for Micro and Small Enterprises (CGTMSE) worked thus far in extending col-lateral-free credit to MSMEs?In order to augment credit flow to Micro and Small Enterprises (MSEs), the Gov-ernment of India and SIDBI set up the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) in 2000 to encourage collateral-free / third-party guarantee-free loans by providing credit guarantee to banks and FIs. Since then CGTMSE has been making rapid strides. The Trust touched one lakh guarantees on June 16, 2008 and 3 lakh guarantees on March 31, 2010. This shows a major shift in the mindset of bankers to reori-ent their lending policies to MSEs from

security-based lending. The develop-mental impact of the Credit Guarantee Scheme is seen from the fact that more than 1,00,000 guarantee beneficiaries are women, minorities and from other backward sections of society.

Equity or risk capital is a ma-jor bottleneck in the growth of MSME sector. How is it being ad-dressed?SIDBI has created a dedicated Risk Capital Fund of Rs 2,000 crore as per the announcement made in Union Budget 2008-09 to provide risk capi-tal assistance to MSMEs by way of equity, preference capital, option-ally convertible debenture, optionally convertible debt, etc. SIDBI has so far committed Rs 800 crore out of this fund. SIDBI has been acting as a Fund of Funds and contributing to the cor-pus of VC funds for onward VC support to the MSME sector.

SIDBI's wholly owned subsidiary SIDBI Venture Capital Ltd (SVCL) is managing two funds, a dedicated IT fund of Rs 100 crore in collaboration with Department of Science & Tech-nology and IDBI Bank and another SME Growth Fund of Rs 500 crore with contribution from major public sector banks which is for specific sectors like life sciences, biotechnology, retail-ing, pharmaceuticals, light engineer-ing and IT. SVCL has committed Rs 551 crore out of the above two funds.

SMERA has recently launched Green Rating. Tell us something more about it? Green Rating is an innovative credit rating, primarily designed to promote environment friendly and energy effi-cient operations in the MSME sector. Under the Green Rating process, the compatibility of an industrial unit to adhere to good manufacturing pro-cess and practices along with effi-cient use of resources with minimum environmental damage is assessed. It also takes into account compliance of environmental regulatory norms by MSMEs. SMERA has initially developed a Green Rating model for steel sec-tor and is in the process of develop-ing similar models for other sectors. To encourage MSMEs to go for Green

Rating, SIDBI is offering concession in interest rate up to 50 bps in its loan assistance to MSMEs obtaining rating of SMERA Green 3 and above.

While third party rating has been ac-knowledged as an important step to-wards increasing accessibility to finance, Green Rating seeks to link financial as-sistance with environmentally conscious business practice, which is emerging as an important focus for the sector.

What are your suggestions to MSMEs to move back to higher growth path?MSMEs should increasingly adapt the lean manufacturing processes, which we know with different names like 5 S, Kai-zen events, etc. This would help MSMEs to protect their financial fundamentals and minimise the impact of slowdown.

The MSMEs also have to continu-ously incorporate the latest technol-ogy into their production processes to gain efficiency, innovate, their marketing and management func-tions and improve upon their inven-tory management. Energy efficiency is another area where MSME needs to focus. There is a scope of reducing en-ergy consumption by 15-20% in many MSME industries, which will have posi-tive impact on their bottomlines. In fact, SIDBI has initiated a new scheme whereby loans for energy efficiency are being provided on special terms and at concessional rates of interest.

MSME exporters need also to attempt to diversify their export markets to have stability in their export earnings and ex-plore new markets including the untapped domestic markets, which by themselves may be very large. Another area where the MSMEs must pay due attention is in widening their information and knowl-edge base. Traditionally, this sector has been suffering from informational ineffi-ciency. As a result, many an opportunity is missed simply due to lack of informa-tion. SIDBI is always ready to support the MSMEs in all these areas. Simultaneously, the responsibility is cast on industry asso-ciations to play a pro-active role in guiding their members at this crucial juncture and focus on common facilities particularly in clusters, clean development mechanism, consortium markets, common brand building, etc.

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12 STEPS FOR MSME GROWTH

MSMEs have provided the neces-sary impetus for the uptrend in industrial production, exports and employment. Now, the stage has come for these en-

terprises to move up the global value chain and build their global market share. However, the showstoppers are seen to be inadequate bank credit flow, lack of alternative financing sources, limited access to new and innovative technolo-gies, heavy regulatory burden, low productivity levels and acute shortage of well-honed human capital and managerial resources.

The CII National MSME Council under the chairmanship of Mr Ramesh Datla has come up with a 12-point agenda for the implementation of the Task Force recommendations. The 12-point agenda was presented to Mr Dinsha Patel, Minister of State (IC), MSME, Government of In-dia, in a meeting in New Delhi on July 6, wherein Mr Datla reaffirmed the industry's commitment to sustained MSME growth and development.

12-Point Agenda (i)To encourage ICT use by MSMEs there is need for enhanced depreciation on IT products. It is recommended that the government consider giving MSMEs 100% depreciation, once in a block of three financial years, for an annual in-vestment in IT equipment and software up to a limit of Rs 25 lakh.(ii)Provide tax benefits to companies to source from MSMEs and adhere to the payment sched-ule, as per the terms of the contract, agreed upon with their vendors. (iii)Promote environment-friendly energy tech-nologies. For this, there is a need to create a Central Climate Friendly Technology Fund.(iv)Facilitate the establishment of an SME Ex-change while ensuring product innovation and without compromising on risk management.(v)There is a need for the formulation of the purchase preference policy, as under Section 11 of Micro, Small and Medium Enterprises Devel-opment (MSMED) Act, 2006, that enables the Central and state governments to notify, from time to time, preference policies in respect of

procurement of goods and services, produced and provided by MSEs.(vi)There is a need for reduction in the number of litigations through simplification of regula-tory framework for the MSMEs. The various employee-related regulations such as the Provident Fund Act, The Employees State Insur-ance (ESIC) Act, the Factories Act, the Industrial Disputes Act, the Contract Labour Act etc., are seriously impairing the growth of the MSME sector. Hence, the recommendations made by the Working Group or Labour Laws by the Plan-ning Commission and referred in the report of the 2nd National Labour Commission must be discussed with the industry, and the various la-bour regulations be suitably amended.(vii)Effort should be made to adhere to the schedule of introduction of GST and for this purpose, announce a time schedule for each important step, such as, issuing a White Paper on model and rate of GST for public comments, placement of draft GST Bill for clearance by Par-liament, and finalising the GST legislation and rules. The most preferred option is a unified, single rate of 12% for GST.(viii)There is a need for policy guidelines to en-courage FDI participation by NRIs in the MSME

sector. This would include no export obligation and a continuation of the small industry status even if FDI is more than 24%. Also required are a separate platform for facilitation, automatic approval for 100% FDI from NRIs, and other promotional measures.(ix)There is the need for revamping the credit rating system for MSMEs. The RBI could consti-tute a group along with the Indian Banks Associ-ation and the credit rating agencies to work out a uniform credit rating format and processes.(x)Earmark 15% for MSEs within the overall pri-ority sector lending, as recommended by the Working Group on Micro & Small Scale Enter-prises for the eleventh Five Year Plan.(xi) All registered enterprises graduating from 'micro & small' category to 'medium' category are to be treated at par for the applicability of all promotional schemes, announced and implemented by the office of the Development Commisioner (MSME).(xii)Capacity building should assume priority. The CII through its LM Thapar Centre for Com-petitiveness for the SMEs would work upon 12 new clusters impacting approximately 100 MSMEs and also take the number of clusters from 200 to 212.

Meeting with Mr Dinsha Patel, Minister of State (IC) for MSME: (R-L) Mr Ramesh Datla, Chairman, CII National MSME Council, Mr Dinsha Patel, Minister of State (IC) for MSME, Government of India & Mr Marut Sen Gupta, Senior Director, CII

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ery of a service, such as a bank or a fast food restaurant.

Elements of design, particularly graphic design, will form part of prod-uct, service and company branding and advertising strategy.

The purpose of design is to do things better, improve a situation, and make a positive difference. The role of design in business is about creating value. A company can use the design process to add value to products, ser-vices, and to the organisation itself. A well-designed product, service, or organisation is more valuable than a product, service, or organisation that is not well-designed.

Design Clinic SchemeThe Ministry of Micro, Small & Medi-um Enterprises, Government of India,

decided to implement the Design Clinic Scheme for providing de-sign expertise to the MSME sec-tor during the 11th Plan period. The objective of the scheme is to enhance industry under-standing and application of design and innovation, and to

promote design as a value add-ing activity and integrate it into mainstream business and indus-trial processes of MSMEs.

Mr Dinesh Rai, Secretary, Ministry of MSME, has been quoted saying that to become successful, Indian MSMEs will need to adopt a global mindset

to build and achieve cost

The goal is to help MSME manufacturing industries move up the global value chain by switching to original design manufacturing and hence original brand manufacturing

Designing a Winning Formula

Innovation is the main driving force of economic development for developing as well as de-veloped economies. With their flexibility and responsiveness,

MSMEs play a vital role in innovation. MSMEs have to innovate to fill the op-portunities created by the changing and globalising marketplace. Howev-er, in order to facilitate the innovative activities of MSMEs, appropriate eco-nomic and policy environments are necessary.

Indian MSMEs produce a diverse range of products from very simple to technically complex products. How-ever, these enterprises are extremely vulnerable to changing market dy-namics. It is indeed critical for the Indian MSMEs to maintain their congruency with the current times. Design holds the key to their sustained growth and development.

Designs on GrowthDesign is recognised as an innovative discipline that can help MSMEs to survive and evolve into an increasingly complicated market, where new competitors arrive constantly and where clients and users are every day more aware of their needs and want to satisfy them faster and better.

Design is a struc-tured creative process.

It is readily associated with industrial product design for manufactured productsÐspecifically the look of a product. However, the application of design is much broader, such as, design for function; for aesthetic ap-peal; for ease of manufacture; for sustainability; for reliability or qual-ity and for business processes them-selves. Service design affects how customers will experience the deliv-

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ing is to assist local enterprises with en-gaging external design expertise in the form of consultancy. Besides, projects supported should lead to new design strategies and projects supported must be impactful and effectively develop the capabilities of the local enterprise

The applicability of project funding is to an individual MSME or a group of MSME coming together. This means that if for common interest a certain number of MSMEs are to come together or MSMEs based in a certain industrial clusters are to come together, they can apply for proj-ect funding under this scheme.

CII Role The CII National Committee on Design is the reference point in India on design and works closely with the stakehold-ers for strategising and implementing all the design initiatives in the coun-try. CII Design initiatives are focused on the following areas: competitive-ness of industry by design-branding, promotion of design through media, design education, design for culture, society and environment and imple-mentation of design policy. CII's last 10 years work in design has resulted in the Government's announcement of National Design Policy.

CII prepared the detailed project report on Design Clinic programme for MSMEs. CII will be closely working on this with NID, the implementation agency for this scheme, to build the competitiveness of MSMEs through De-sign across the country.

excellence, acquire market rapidly, strengthen design and innovation skill, build a global or regional operating footprint and master the ability to de-sign world class products and process.

The goal is to help MSME manufac-turing industries move up the global value chain by switching the produc-tion mode from original equipment manufacturing to original design man-ufacturing and hence original brand manufacturing. The general approach is to bring Indian manufacturing sec-tor and design expertise on to a com-mon platform and to provide expert advice and cost effective solutions on real time design problems, resulting in new product development or continu-ous improvement and value addition for existing products.

"It is a unique and ambitious design intervention scheme for the country's large number of micro, small and me-dium scale enterprises, which com-bines design awareness programmes and project based design assistance," Rai has said.

The total scheme budget is Rs 73.58 crore, out of which Rs 49.08 crore is provided with Government of India as-sistance and the balance amount to be contributed by the beneficiary MSMEs. The Design Clinics scheme is being implemented through the National In-stitute of Design (NID), Ahmedabad acting as a single coordinating body responsible for delivering the scheme.

The Design Clinic will be guided by the following key principles: (a) rigor-ous yet applicant friendly process, (b) promotion, dissemination in regional/local languages understood by the MSMEs, (c) establish benefits clearly without overwhelming the MSMEs, (d) learn from other successful design support programmes and (e) establish a clear process pipeline.

Design, innovation and growth are linked. Innovation and design aren't simply about new products or tech-nology. They're also about how to improve products in everyday use, leading to reduced costs, increased usability and new business opportuni-ties. The wider application of design by the MSMEs is expected to increase the value and competitiveness of their products and services.

The Design Clinic scheme would help MSMEs to avail independent advice on all aspects of design. It Would help MSMEs realise and achieve their de-sign-related objectives. Practical sup-port is provided to MSMEs via one-to-one advice, seminars, and workshops. This specialist advice is provided by experienced designers for new product development as well as enhancing ex-isting product portfolio.

Design Awareness & Design Proj-ect FundingThe scheme is divided in two major parts: Design Awareness and Design Project Funding. The objective of de-sign awareness is to create general awareness and sensitisation about the value and power of design for busi-nesses through seminars, talks, work-shops and other engagement methods. It is a combination of design need as-sessment survey and workshop/semi-nar for the participant members of the cluster selected. A seminar will cover the design related topics in a broad way with the intent to communicate the importance of design, its useful-ness and its role in delivering business value. It would be delivered in lecture-style by one or more experts deliberat-ing on a topic.

Design Project Funding is done based on need analysis. The assistance will be provided to the MSMEs in their selection and engagement of design consultants and professionals.

The objective of Design Project Fund-

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options. EnNatura has already carve a niche for itself in this domain. Users of EnNatura printing inks get to use the label that says Printed using ClimaPrint eco-friendly printing inks by En Natura.

Mr Bhimania said that while it were the corporates, publishing houses and printers that evinced interest in the EnNatura solution, the company plans to touch the large packag-ing industry too in the coming months. The global market for such products are growing and EnNatura is geared to the leverage the opportunities.

The technology will be useful for com-panies that currently use non-bio-de-gradable ink and reams of paper to make brochures, advertising, packaging and other applications.

EnNatura has filed a US and an Indian pat-ent. Our asset is our technology and we need to protect it, say Bhimania

The printing industry is steadily reinventing itself in order to keep up. Now there are print-ers which can integrate directly to devices such as digital cameras and scanners or even with memory cards. Companies are work-ing hard to even make the printing process easier and cheaper for both the offset and the desktop printers. As the face of hardware changes, the composition of inks is changing too. Even the materials used in printing have undergone a vast transition. Where earlier petroleum was the buzzword, it is now nano-technology and biodegradable compounds. EnNatura has opened a new window of op-portunity for the adoption of green technolo-gies in the printing domain.

The company was incubated at IIT Delhi and has since set up its operations in Okhla Indus-trial Area Ph-I in Delhi, setting new standards in green manufacturing.

The company may be contacted by email: sidhartha.bhimania@ennatura.com

Delhi-based EnNatura Technology Ventures has developed and commercialised offset printing ink using vegetable oils, that is completely bio-degradable, lending itself to recycling of paper.

Green Manufacturing: EnNatura Way

Green manufacturing is not just an environmental consider-ation but a cost-effective way of doing business. This has been amply demonstrated by a host

of young Indian manufacturing firms that at very outset adopted green technologies and green energy, creating in its wake a new wave of green manufacturing in the country. This bottom-up approach will transform the Indian manufacturing sector in the coming years, even as India sets a high watermark in this domain.

Several of these entrepreneurial initia-tives have the support of New Ventures India (NVI), a joint initiative of the CII-Sohrabji Go-drej Green Business Centre, Hyderabad, and the World Resource Institute, Washington DC. NVI in turn is supported by USAID under the Global Development Alliance mechanism, US Department of State Asia Pacific Partnership and British High Commission under the Stra-tegic Program Fund, USDoS under the Asia Pacific Partnership and Citi Foundation.

SME Business is introducing a series of pro-

files of these green manufacturing initiatives. This edition focuses upon EnNatura Technol-ogy Ventures (P) Ltd.

EnNatura Technology Ventures (P) LtdEnNatura Technology Ventures, a Delhi-based printing ink manufacturing company promot-ed by Mr Sidhartha K Bhimania, Mr Krishna Gopal Singh and Mr Sandeep Mourya, has developed and commercialised offset print-ing ink using vegetable oils, that is completely bio-degradable, lending itself to recycling of paper. As such, the global offset print-ing industry uses 1 million tonnes of petro-leum products and emits 500,000 tonnes of volatile organic compounds every year. The EnNatura printing ink system reduces emis-sions by 95% and reduces the total operating costs of the printer by 25-30%. Besides, the EnNatura ink gets removed easily during the de-inking process.

Mr Bhimania told SME Business that the demand for eco-friendly printing inks would grow as the regulatory regime becomes stringent and printers seek more affordable

Mr Krishna Gopal Singh (left) & Mr Sidhartha Bhimania

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Religare and Textile IndustryReligare Finvest Ltd. has been doing a con-siderable work under its lending SME vertical for helping all Textile and Apparel Industries meet their working capital and business ex-pansion fund requirements through a flexible and transparent lending program. We provide loans to all SMEs under two broad categories:1. Unsecured SME Loans: Rs. 10 Lakh to Rs 200 Lakh2. Secured SME Loans: Rs. 10 Lakh to Rs. 500 Lakh

Unsecured SME loans are provided to all Textiles and Apparels SMEs working as yarn manufactures, job works, garment exporters, retail chains, etc., and are assessed on the fi-nancial merits , promoters background and business model of the group.

Secured SME loans are given to facilitate purchase of new plant and machinery like Industrial Sewing Machines, Spinning Mills, Dyeing Units, etc., required frequently within this industry.

Religare Finvest SME team is also forg-ing strategic manufacturing alliances within this space with various companies like Juki, Brother, Barudan, etc., for helping their cus-tomers.

Religare Finvest Ltd. is keen to work with all Textile SMEs in the country and partner with them on various platforms to serve their internal and external environment.

This article is developed by the manage-ment team of Religare Finvest Limited - a lending & distribution arm of Religare Enter-prises Limited.

Credits: Management team of Religare Finvest Limited - a lending & distribution

arm of Religare Enterprises Limited.

The Indian textile industry con-tributes about 14% to industrial production, 4% to the gross do-mestic product (GDP) and 17% to the export earnings of the coun-

try. It provides direct employment to over 35 million people and is the second largest provider of employment after agriculture. l Of the 2,300 processors in India, only 200 units are integrated with spinning, weaving or knitting unitsl Bulk of apparel and home textile manufac-turing accounted for 77,000 small scale unitsl The textile industry across the value chain is largely decentralised l Units mostly independent and small scale in nature, rather than composite units under-taking all activities together l Large scope for entry of organised inte-grated textile manufacturers.

Government Initiativesl The Ministry of Textiles proposed to allocate $785.2 million for the modernisation of the textile industry.l The Scheme for Integrated Textile Park (SITP) to facilitate setting up of textiles parks with world class infrastructure facilities.

Investmentsl $5.35 billion of foreign investment is expect-ed to be made in India in the textile sector over the next five years.

Spinning Growth Story

l The textiles industry has attracted foreign direct investment (FDI) worth $817.26 million between April 2000 and March 2010.

Salient Policy Features: Indian Textiles & Clothing Industry: 2015l Aims to neutralise the impact of eco-nomic crisis on Indian textiles industryl Diversify exports and domestic marketl Encourage consolidation of SME enter-prisesl Encourage maximum value addition in the countryl Deepening fibre consumption of Indial Building of 20 global brands of Indial Promote manufacturing of high-tech fi-bres and technical textilesl Encourage energy efficient and emission reduction technologiesl Increase indigenisation of textile equip-ment and increased technological support

STRENGTHS OPPORTUNITIES

Independent and Self-reliant Growth rate 6-8%

Abundant raw material for controlled costs and reduced lead time

Large potential ,multinational and international markets

Availability of low cost and skilled labor provides competitive advantage

Product development and diversification to cater global needs

Great advantage in spinning sector and presence in operation and value chain

Elimination of Quota restriction for greater market development

Large varieties of cotton fibre and synthetic fibre

Market shifting towards branded ready-made garments

Manufacturing flexibility that increases productivity

Increased disposable income and purchasing power on Indian Customer

Growing economy and potential domestic and international market

Emerging retail industry and malls

One of the largest foreign revenue contributor -12% of India's total exports

Greater investment and FDI opportunities

value chaIN oF TeXTIle (apparel) INdusTrY IN INdIa

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value chain

The process of liberalisation and market reforms since 1991 has brought challeng-es as well as bouquet of opportunities for MSMEs in

India. The challenges are intense com-petition both in domestic and overseas markets, making it imperative for the enterprises to maintain, improve and sustain competitiveness through lower cost and improved quality. The oppor-tunities include expansion of business by entering into new markets.

Indo-UK MSME TiesIndia-UK business relations have un-dergone a massive change over the last couple of decades. Once perceived as a less developed country, India had transformed itself into the fastest growing economies of the world.

In 1993, in response to opportunities created by the bold and imaginative liberalisation programme introduced in India, the then British and Indian Prime Ministers publicly endorsed the creation of the Indo-British Part-nership Initiative (IBPI). Its mandate was to increase bilateral trade and in-vestment with particular emphasis on SMEs and to promote technology and science links between the two coun-tries. The success of the partnership is reflected in significant increase in bilateral trade since 1993. The prevail-ing market situation in the European Union (EU) countries indicates that the Indian SME products have a prom-ising future there.

India Story The Indian MSME sector is the driving force for the long term growth of the Indian economy. The balanced regional distribution of growth along with de-velopment of local skill and resources are added advantage of MSMEs which are pivotal in grassroots development,

social progress and combating pover-ty. MSMEs unhesitatingly play a vital role and in fact they are the backbone of the Indian economy and prudence suggests that the backbone be not only protected but strengthened.

Exports from the SME sector have experienced excellent growth rates since the turn of new Millennium. This has been mostly fuelled by the performance of units in sectors such as garments & knitwear, leather, auto components, drugs & pharma-ceuticals, processed foods and gems & jewellery.

India exports to UK are textiles and readymade garments, gems and jew-ellery, footwear, leather and leather goods, engineering goods, metal manufactures, power generating equipment, software services, phar-maceuticals, chemicals, marine prod-ucts, rice, tea and other agricultural products like nuts and preserved fruits and vegetables.

UK Facts According to the Department for Business Innovation and Skills, there were an estimated 4.81 million pri-

vate sector enterprises in the UK at the start of 2008, an increase of 104,0003 (2.2 per cent) since the start of 2007. These levels are the highest since the time series began in 1994. These enterprises employed an estimated 23.1 million people, and had an estimated combined an-nual turnover of £3,000 billion.

SMEs together account for 99.9% of all enterprises, 59.4% of private sec-tor employment and 50.1% of private sector turnover. Employment in SMEs is estimated at 13.7 million, 287,000 (2.1%) higher than in 2007. Turnover in SMEs is estimated at £1,500 billion, £61 billion (4.2%) higher than 2007.

Cooperation in human capital The Indian government is committed to promote the growth and develop-ment of the MSMEs and to enhance their competitiveness so that these en-terprises contribute to accelerate the expansion of productive employment in the country. It seeks to fulfill its mis-sion by formulating policies in skill and entrepreneurship development.

Business chambers have also initi-ated many programmes in this direc-tion. For instance, CII has partnered with City & Guilds to provide hands-on vocational skills to the workforce in India in order to help them gain ac-cess to meaningful employment and sustainable livelihood opportunities, to effectively address and dent the un-employment situation in the country. The initiative envisages India as the future skills capital of the world with a skilled and productive workforce that matches international standards of quality and productivity. The skills initiative has tested out its models in areas such as rural Maharashtra, Jam-mu & Kashmir, Andhra Pradesh, Tamil Nadu, Delhi, etc.

City & Guilds is the world's leading vo-

Partners in ProgressIndia and the UK make natural partners in MSME development.

British Prime Minister David Cameron

"As the world's cen-tre of gravity moves

from Europe and the Atlantic to the

south and the east I believe it's time for Britain and India to forge a new special

relationship."

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cational skills awarding body. It has been committed to encourage education and training in, and for, the workplace. Em-ployers worldwide rely on City & Guilds to develop a qualified workforce equipped with requisite competencies for workplace excellence. Individuals use City & Guilds for continuous professional development and obtaining a 'license to practice'.

In India, City & Guilds has participated at different levels to ensure upgradation of quality of manpower. Both in the cor-porate and social sectors it has involved itself with benchmarking occupational skills and quality assuring training prac-

tices. It offers a wide variety of services including standard qualifications, de-velopment of occupational standards, assessments and certification, custom-ized qualifications, quality assurance, accreditation services, etc.

City & Guilds has also been actively involved with developing manpower solutions for various industries and segments of society. It has actively participated in social upliftment ac-tivities through skills development.

Small Industry in Open Era In a new era of open economies, it is

increasingly recognised that small in-dustries cannot afford to sustain in isolation from small industries of other countries and this increasingly neces-sitates them to have long term link-ages as they succeed on the principle of most efficient scale of economy. The intense competition is increasingly forcing small industries of various parts of the world to leverage upon the com-plementary strengths of each other in order to survive and thrive. Thus, not confrontation but cooperation is being increasingly witnessed between small industries in different countries.

companies. A report by Information, Tech-nology and Innovation Foundation sug-gests that investment in ICT infrastructure would create around 700,000 jobs, half of which would be in small businesses.

The UK is the world's sixth largest manufacturer, with particular strengths in advanced engineering and energy ef-ficiency which complement the capabili-ties of Indian businesses.

The country offers global hubs in fi-nancial and business service, creative industries and world-leading facilities in life sciences. The UK also provides a springboard for Indian businesses to glo-balise, using the networks, connections and support available in the UK to reach new international markets.

Further, the UK is the easiest place to do business in Europe. It has the least number of barriers to entrepreneurship in the world. World Bank has suggested that it takes just 13 days to set up a busi-ness in the UK, compared to the Europe-an average of 32 days. There are no re-strictions on a UK company being owned by foreign nationals.

How can Indian SMEs enter the UK market? There are various schemes in place to help smaller companies. A UK Innova-

tion Investment Fund promotes venture capital funding for technology oriented companies. The UK has a unique R&D tax credit scheme which allows smaller companies to claim 175% of the qualify-ing expenditure.

The most common way to enter the UK market is to establish a branch office of existing company or setting up subsid-iary/independent UK company.

UK Trade & Investment (UKTI), the UK government's business support agency, has a network of nine offices in India -- Ahmedabad, Delhi, Chandigarh, Pune, Mumbai, Chennai, Hyderabad, Bangalore and Kolkata -- with expert staff ready to help Indian businesses invest in the UK.

The support of UK Trade & Investment, EMDA and Invest Leicestershire helped us to open our United Kingdom office very efficiently, says a representative of Jaivel. UK Trade & Investment spent a great deal of time with us to ensure we spoke with the right people.

Before coming to India, I met many Indi-an companies in the UK successfully doing business in the UK. They were very posi-tive about the welcome they had received. Our UKTI team is keen to help more Indian businesses to set up in the UK.

For more information on UKTI, visit: http://ukinindia.fco.gov.uk/en/

UK Calling

India firms go to the UK for the innovation excellence, world class creative talent, strong research and development base, open business environment and opportunities in a wide range of sectors.

The UK is by far the most popular busi-ness destination in Europe for Indian companies, with over 700 of the 1,200 Indian firms in the EU.

Why do so many Indian companies, including SMEs, come to the UK? India firms go to the UK for the innova-tion excellence, world class creative tal-ent, strong research and development base, open business environment and opportunities in a wide range of sectors.

To illustrate this, the Information and Communication Technology (ICT) sector is the largest in Europe, and is expected to grow to over £29 billion by 2012. The UK aims to become a world leader in cloud computing. Its Digital Britain strategy will create huge opportunities for telecom

Barry Lowen, Director, UKTI, India

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India & Czech: Fast Forward

India and Czech Republic have embarked on a new voyage of economic partnership with a keen focus on SME cooperation. The 2nd Global Industrial R&D

Conclave, organised by CII in New Delhi on May 11, with the support of Czech Republic as partner country and Council of Scientific & Industrial Research (CSIR), Ministry of Micro, Small and Medium Enterprises (MSMEs) and Global Innovation Technology Alliance, set the tone for discussion on cooperation in diverse business fields.

Addressing the delegates at the Conclave, Mr Prithviraj Chavan, Minister of State for the ministries of Ministry of Science and Technology and Ministry of Earth Sciences, and in charge of Prime Minister's Office, said that Czech republic has intellectual capital with a great history of innovation. He said that both countries could benefit from initiatives in joint research and contract research.

Commenting on the opportunities for bilateral SME cooperation, Mr Lubos Vanek, Deputy Minister of Trade, Government of Czech Republic, said his country would welcome investments by Indian SMEs, while adding that an enabling policy environment, simplified tax laws and efficient administrative support will help the investors to obtain the best returns.

Mr Vanek said the bilateral SME cooperation was greatly aided by the spurt in bilateral economic cooperation. As a case in point, the two countries signed the Economic Cooperation and Protocol on Amendment of the Agreement

between India and Czech Republic for the Promotion and Protection of Investments signed on October 11, 1996, during Indian Vice President, Mr Hamid Ansari's visit to Czech Republic in June this year.

India and Czech Republic have also signed the Social Security and Administrative Arrangement whereby Indian and Czech Republic citizens working in either country for less than five years would be exempted from social security contributions. Around 700 Indians are working in Czech Republic whose interests will be protected through this agreement.

Mr Vanek said that energy and services sectors hold much promise bilateral cooperation, and added that SME cooperation in particular will be helped

by joint initiatives in knowledge sharing and training.

Talking about India-Czech Republic cooperation in the SME domain, Mr Ji Krechl, Director of R&D Support Department, CzechInvest, said that businesses on both sides would benefit from knowledge sharing and cooperation in business intelligence.

CzechInvest, established in 1992 by the Ministry of Industry and Trade, is the investment and business development agency of the Czech Republic whose services and development programmes contribute to attracting foreign investment and to developing Czech companies. The agency provides comprehensive services for investors - full information assistance, handling of investment incentives, business property identification, location of Czech suppliers, aftercare services; business infrastructure development; and access to structural funds.

Mr Krechl said that Czech Republic is very open to foreign investments, especially since the country is faced with an ageing population and would want to leverage the opportunities of engaging Indian investors and working professionals.

He said that India with its large scientific and technological manpower pool is well positioned to support the Czech Republic's industry. He also pointed out that Czech Republic is today faced with a shrinking pool of technically trained professionals as young people in the country do not take up scientific and technological studies as a priority anymore.

India and Czech Republic have identified several areas of economic cooper-ation. Businesses on both sides would benefit from knowledge sharing and cooperation in business intelligence.

Mr Lubos Vanek, Deputy Minister of Trade, Czech Republic

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Mr Krechl said that the key investment opportunities are in machinery, food processing, agricultural products and medicare. There is huge opportunity for cooperation in R&D. Without innovation there will be no growth, he said.

He said that joint ventures between Indian and Czech companies are feasible but the Czech policies regarding this are conservative.

Referring to the association with the Indian Technology Day, he said it was a great opportunity for both countries to deepen the economic cooperation.

Indian ambassador in the Czech Republic, Mr D P Srivastava, said that SMEs occupy a key position in the Czech Republic. The capital base being small,

SMEs play an important role in the country's industrial growth and chiefly drive innovations.

He said that Indian companies could leverage the opportunities in food preservation that are available in Czech Republic. This would be particularly relevant to India where huge quantities of fruits and vegetables perish owing to lack of processing facilities and technologies.

Mr Srivastava also referred to the opportunities for contract research, and added that the Czech Republic has an open economy and welcomes investments in diverse business sectors. He said that Indian companies have successfully established JVs in

areas like yarn and textiles, pharma and auto parts.

Mr Samir K Brahmachari, Director General, Council for Scientific & Industrial Research (CSIR) said that MSMEs are aligned with all labs that come under the Council. Commenting on the opportunities for cooperation with Czech Republic, he said that the opportunities like in aircraft designing, robotics, etc. SMEs can be manufacture the components needed in these sectors, he said.

It is evident that for Indian SMEs, the key opportunities in Czech Republic are in contract research, apart from investments in key manufacturing and agri-processing sectors.

CII and partner organisation United States-India Busi-ness Council (USIBC) have launched an Indo-US SME Initiative with the objective of exploring commercial opportunities for small and medium companies in both countries and expanding reach into lesser known but rapidly growing cities.

The Initiative was announced at the interactive ses-sion on Accelerating Inclusive Growth: The Future of the U.S.-India Commercial Relationship co-organised in Washington DC by USIBC and the US Department of Commerce's International Trade Administration (ITA). Speaking at the session, Under Secretary of Commerce for International Trade, Francisco Sanchez, ITA, also

unveiled their focus on developing engagement with India's Tier 2 & 3 cities with the GEMS initiative Growth in Emerging Metropolitan Sectors, keeping in tune with US President Obama's National Export Initiative. The growth in emerging metropolitan sectors will accel-erate and will form great markets for US and Indian businesses. The promise of India is, of course, the GDP of its urbanised areas that will grow from about $700 billion today and reach almost $4 trillion in 20 years. he said.

SMEs form the backbone of both the Indian and the US economy. Their contribution to overall economic growth has been increasing rapidly and thus creating a facilitative business and policy environment remains crucial to strengthening economic recovery, stimulat-ing growth and creating jobs in both countries.

The next phase of growth in India-US bilateral eco-nomic relations will come from the SME sector. This platform will provide the much-needed impetus and with President Obama's forthcoming visit to India, we want to take Indian and US businesses to the next level of partnership said Ms Kiran Pasricha, Deputy Director General, CII.

This SME Initiative presents a ''win-win'' opportunity for both sides and enriches the global value chain to mutual advantage," said Mr Ron Somers, President, USIBC, encouraging companies to explore beyond the well known metros.Ms Meera Shankar, Ambassador of India to the United States, outlined infrastructure, low cost manufacturing, agriculture, social services including education and health as priority sectors to tap into, while exploring commercial opportunities in India.

CII, USIBC launch Indo-US SME Initiative

(L-R) Mr Ron Summers, Ms Kiran Pasricha & Mr Sanchez

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For further details, contact Marut Sengupta, Confederation of Indian Industry, 23 Institutional Area , Lodi Road - 110 003, New Delhi; Ph: 9350800950, Direct Tel: 91-11-24653006; Tel: +91-11–24629994–97 Ext 407; Fax: +91-11–24682229; Email: marut.sengupta@cii.in

contact: Hemant Nitturkar; Email: hemant.nitturkar@cii.in

New Ventures India / HyderabadTitle/Theme date venueroad show For re/ee projects (pFaN) 14 July chennairenewable energy workshop august hyderabad

contact: S M Manoharan; Email: s.manoharan@cii.in; M Subramanian; Email: m.subramanian@cii.in

CII Erode ZoneTitle/Theme date venueconference on Innovation in Technical Textiles 28 July hotel club melangeerode energy conclave 2010 august hotel club melange

contact: l For Energy Programmes: Arpit Bejwalkar; Email: arpit.bejwalkar@cii.in l For Quality Programmes: Vishal Sharma; Email: vishal.sharma@cii.in; Reema Shrivastava; Email: reema.shrivastava@cii.in l For HR Programmes: Surya Dhawan; Email: surya.dhawan@cii.in l For TCM Programmes: Harpreet Singh; Email: harpreet.singh@cii.in

CII-LM Thapar Centre for Competitiveness for SMEsTitle/Theme date venuecad cam seminar 13-14 July coimbatoreTraining programme on paints & powder coating for auto Industry 19-21 July puneTrain the Trainer 22-23 July puneTraining prog. on embedding profit orientation in your organization 21 July gurgaonTraining programme on effective Inventory management 23 July NoidaTraining programme on energy management 23 July rudrapurhr mission / employee performance 23 July gurgaoncertification programme on problem solving using Qc approach 27 July chandigarhcorrosion management summit 5 aug delhiTraining programme on manufacturing excellence 20 aug dehradunTraining programme on effective communication skills 20 aug pune/goaTraining programme on marketing strategy & Brand communication 25 aug gurgaonroTeQ 2010 ( 2 day National seminar) 26-27 aug chandigarhTraining program on protective coating for Industrial structures 26-28 aug vishakhapatnam

contact: l C M Tungare; Email: c.tungare@cii.in; l Tarjani Patel; Email: tarjani.patel@cii.in

CII MSME Department: Western RegionTitle/Theme date venueIT for msmes 5 July punesession on vendor development 6 July NashikTurnaround management and succession planning 14 July Nagpursecond meeting of the msme sub committee 6 august Indoresecond vidarbha msme meet 20 august Nagpur

SME Focused Projects, Events, Meetings, Interactions & Training Programmes (July – August 2010)

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upcoming events