Working Group on MSMEs _ Growth for The

download Working Group on MSMEs _ Growth for The

of 38

Transcript of Working Group on MSMEs _ Growth for The

  • 8/6/2019 Working Group on MSMEs _ Growth for The

    1/38

    Submission to the Sub-Group Von Infrastructure6th June, 2011, New Delhi

    By.R GnanasmbandanVice-President, TANSTIA

    Working Group on MSMEsGrowth for the 12th ( - )Five Year Plan Period 2012 17

  • 8/6/2019 Working Group on MSMEs _ Growth for The

    2/38

    Infrastructuren According to the Online Etymology

    Dictionary the wordinfrastructure has been used inEnglish since at least 1927,originally meaning "The

    installations that form thebasis for any operation orsystem"

    n Infrastructure is the basic physicaland organisational structures

    needed for the operation ofa society or enterprise, or theservices and facilitiesnecessary for an economy tofunction.

  • 8/6/2019 Working Group on MSMEs _ Growth for The

    3/38

    Infrastructure

    n The term typically refers to thetechnical structures thatsupport a society, suchas Roads, Water Supply,

    Sewers, Electrical Grids,telecommunications, and soforth.

    n Viewed functionally, infrastructure

    facilitates theproduction of goods andservices, and also for thedistribution of FinishedProducts to Markets, as wellas basic social services suchas Schools and Hospitals.

  • 8/6/2019 Working Group on MSMEs _ Growth for The

    4/38

    PMs Task Force CommitteesRecommendations

    n 8.10 A national programme for renewalof Industrial infrastructure may beundertaken on the lines of JNNURM.

    n The IIUS/IID two programmes wouldrequire additional funding support toassume the character of a National

    Mission

    nWhat is the status to-day?

    n

  • 8/6/2019 Working Group on MSMEs _ Growth for The

    5/38

    Land

    n Availability of Land for MSEs has tobe ensured

    n Land Bank has to be created ineach District

    n Government should identifyPuramboke lands (Barren Lands)and allot it to MSEs ataffordable price.

    n Land use classification has to beupdated based on the demand

    n Clear Policy should be evolved onChange of Classification for

    Industrial purpose.n

  • 8/6/2019 Working Group on MSMEs _ Growth for The

    6/38

    PMs Task Force on MSME8.10. (v)

    n Need to encourage settingup/earmarking of at least one

    industrial estate in each block formicro and small enterprises

    n

    What is the status to-day?

  • 8/6/2019 Working Group on MSMEs _ Growth for The

    7/38

    Creation of New IndustrialEstates

    n Out of 26.1 million SMEs in thiscountry not even 10% of theunits situated in formalIndustrial Estates

    n Majority of them are only inMixedResidential/Residentialareas.

    n Creation of Small Estatesexclusively for Micro Units,Service Industries, specificproducts should be givenpreference

  • 8/6/2019 Working Group on MSMEs _ Growth for The

    8/38

    Creation of More IndustrialEstates

    n Minimum 3 Industrial estateshas to be formed in eachdistrict.

    n

    Establishing the secondestate should be allowedbased on the potential ofthe area

    n Approval for the subsequent

    estate need not bedelayed till the allotmentof plots in the previousone

    n

  • 8/6/2019 Working Group on MSMEs _ Growth for The

    9/38

    PMs Task Force on MSME8.10. (iii)

    n Flattened Factory Complexes may beset up, particularly in and around

    large cities for MSEs.

    nWhat is the status to-day?

    n

  • 8/6/2019 Working Group on MSMEs _ Growth for The

    10/38

    Flatted Constructions

    n India is one of the thickly populatedcountry and availability of Land isscarce

    n The need to go in for Vertical constructionis inevitable

    n A scheme has to be evolved for includingflatted constructions under IID schemeand concepts have to be evolved to

    identify the Common Usage such asPathways, Staircases, Varandhas andCommon Lighting.

  • 8/6/2019 Working Group on MSMEs _ Growth for The

    11/38

    Creation of New IndustrialEstates Fund Flow

    n Disbursement of funds has to bedone on completion ofappraisal by SIDBI.

    n

    No need to wait for furtherinspection by other CentralAgencies

    n Grant under SME CDP has to beenhanced, proportionately to

    the size of the Estate or onspecial cases.

    n Flexibility in use of funds undervarious sub-heads such asRoad, Drainage, Water Supplyetc.

  • 8/6/2019 Working Group on MSMEs _ Growth for The

    12/38

    Re-approval

    n The present schemeinsist for a re-approval even forminor changes in theproject.

    n This has to be insisted

    only on majorchanges

    n Minor alterations need

    not necessitate re-

  • 8/6/2019 Working Group on MSMEs _ Growth for The

    13/38

    Up gradation of the ExistingIndustrial Estates

    n Even the Fourth census did notreveal how many industrialestates are in this countryand how many units are

    situated in Own/RentalBuildings

    n It has also not revealed thestate of the facilities

    available in the IndustrialEstates

    n There is no facility like ETP,Captive Power Generationand Marketing/Display

    centers in the old Estates

  • 8/6/2019 Working Group on MSMEs _ Growth for The

    14/38

    Up gradation of the ExistingIndustrial Estates

    n There is an Urgent need to up-grade the existing estates.

    n State Government Agencies arenot interested in utilizing theMSE-CDP for up-gradationand they are concerned onlywith the establishment of newone.

    n A special scheme has to beformulated for up-gradation ofexisting estates taking intoaccount of the specialrequirements of each estate.

  • 8/6/2019 Working Group on MSMEs _ Growth for The

    15/38

    Maintenance of the Estates

    n Estate Maintenance hasbecome a ticklish issue

    n Local Bodies are keen incollecting property tax and

    other levies but not inmaintenance

    n Small Industry Developmentcorporations charge

    separate levy formaintenance but notdischarging the dutyresulting deterioration ofthe estate.

  • 8/6/2019 Working Group on MSMEs _ Growth for The

    16/38

    PMs Task Force on MSME8.10. (i)

    n As a long term measure, the IndustrialEstates should be entrusted with themunicipal functions including levy oftaxes, responsibility to maintain theinfrastructure within the Industrial Estates

    n Local Bodies will earmark funds for

    Industrial Estates within their budgets

    nWhat is the status to-day?

  • 8/6/2019 Working Group on MSMEs _ Growth for The

    17/38

    Maintenance of the Estates

    n Deemed Local Body Statusshould be given to theIndustrial estates

    n Industrial Township Act has to beinvoked for estates havingmore than 50 Acres of Land.

    n This should be made mandatoryunder the Panchayat Raj Act.

  • 8/6/2019 Working Group on MSMEs _ Growth for The

    18/38

    Maintenance of the Estates-PPP model

    n SPVs should be formed in eachestate with representation fromthe Government and theDeveloping agency

    n It should be empowered to collectcharges and maintain the estate

    n Smaller estates, where the DeemedLocal Body Status/Industrial

    Township act could not beinvoked, local body can sharethe revenue with the SPV.

  • 8/6/2019 Working Group on MSMEs _ Growth for The

    19/38

    Marketing/Display Centre

    n Each estate should have a marketing center/Displaycentre.

    n New estates should include this component whilethe existing estate should be encouraged to

    establish onen Countries like Thailand, China and Siingapore has

    got exclusive productwise display centers

  • 8/6/2019 Working Group on MSMEs _ Growth for The

    20/38

    PMs Task Force on MSME8.10. (i)

    n The State Governments would undertake toprovide dedicated power supply to theIndustrial Estates.

    n Alternatively, funding for common captivepower generation in Industrial Estateswould be encouraged through subsidiesgiven to the SPV managing such facility.

    nWhat is the status to-day?

  • 8/6/2019 Working Group on MSMEs _ Growth for The

    21/38

    Power Availability andElectricity Act

    n Availability of Power is one of the majorcriteria of an Industrial estate

    n Many states, particularly Tamilnadu isfacing acute power shortage

    n Captive power generation has to beencouraged

    n Electricity Act has to be amended towheel power by Estates/Clusters

    and distribute among themselves.(At present the Act permits only anindividual captive power user totransport power)

  • 8/6/2019 Working Group on MSMEs _ Growth for The

    22/38

    Power Generation &Distribution

    n The present grant of Rs. 2.5 crores is verymuch insufficient for any form of powergeneration Cost range from Rs. 5Crores to Rs. 20 Crores depending onthe type of project such asGas/Coal/Wind/Solar etc.

    n It has to be increased to Rs. 15 crores or75% of the total cost whichever is lower

    at least to establish 4 MW.

    n ONGC has to be instructed to give Gas

    wherever available to SME clusters onpriority basis for establishing GasTurbines

    n SPVs should be authorised to buy powerfrom any where and distribute it to its

    member units.

  • 8/6/2019 Working Group on MSMEs _ Growth for The

    23/38

    Priority to MSEs in PowerSupply

    n Many states are providinguninterrupted powers to MNCs anddepriving even the normal power toSMEs.

    n Electricity Act, 2003 has to beamended to stop this unfavourablepractice.

    n Priority in providing Power connection

    and as well as uninterrupted powershould be ensured for MSEs.

    n 50% Subsidy should be given to MicroUnits for buying Gensets.

  • 8/6/2019 Working Group on MSMEs _ Growth for The

    24/38

    Roads

    n Providing Good, Motorable Roads isone of the foremost duty of aGovernment

    n Roads are very essential for anEstate. Unfortunately, many of ourestates lack in this.

    n The subsidy component for Roadsunder the IID scheme has to be

    increasedn Existing estates should be given

    special grant to re-lay the roads.

    n Special funds has to be allotted every

    three yearsto maintain the Roads.

  • 8/6/2019 Working Group on MSMEs _ Growth for The

    25/38

    Sewage, Effluent Collection,Treatment and Disposal

    n Greener Production is the order of theDay.

    n Protecting Environment is every bodysbusiness.

    n Industries should be helped andfacilitated by PCBs rather than beingan inspection agency

    n Technology support should be given by

    PCBs.n Consent fee should be charged only

    based on the Quantum of Effluentand not on the cost of PCEquipments

  • 8/6/2019 Working Group on MSMEs _ Growth for The

    26/38

    Common Effluent TreatmentPlants (CETP)

    n Effluent is unavoidable inManufacturing Industry

    n CETPs are essential for everyestate

    n Government/PCBs should have aproactive role rather thanreactive

    n Grant for CETPs should be

    sanctioned based on thenature of industries

    n Estates for special products likeLeather, Bleaching,Electroplating etc. should be

    given separate funds for

  • 8/6/2019 Working Group on MSMEs _ Growth for The

    27/38

    Support for establishing IntegratedModular Industrial Estates having

  • 8/6/2019 Working Group on MSMEs _ Growth for The

    28/38

    Tool Rooms & Testing Labs

    n Tool rooms/Testing Labsshould be an integral partof an Industrial Estate.

    n We have the scheme but notmuch of Sanctions

    n Rules has to be simplified in

    order to establish morenumber of sector specifictool rooms/testing labs

  • 8/6/2019 Working Group on MSMEs _ Growth for The

    29/38

    Incubation Centers

    n Incubation centers are nowsanctioned only forEducational Institutions

    n Industrial Associations andEstates should beencouraged to set up

    Incubation centersn

  • 8/6/2019 Working Group on MSMEs _ Growth for The

    30/38

    PMs Task Force on MSME8.10. (iii)

    n Flattened Factory Complexes may beset up, particularly in and around

    large cities for MSEsn On similar lines, dormitories for

    industrial workers in industrialestates may be set up on PPPmode.

    nWhat is the status to-day

    ?

  • 8/6/2019 Working Group on MSMEs _ Growth for The

    31/38

    Workers Quarters/Hostels

    n Lack of Skilled/Semi skilled workforce is a major hindrance forMSEs

    n Retaining them and compensation

    package posing a big problemn Compensation goes up because of

    abnormal rents prevailing

    n No Proximity of the living area to

    the Estate is another factorn Availability of Houses/

    Accommodation at affordableRent should be ensured

    n

  • 8/6/2019 Working Group on MSMEs _ Growth for The

    32/38

    Workers Quarters/Hostels

    n As in China every Estate shouldhave workers quarters/hostelswhich should be included ascomponent under IID

    n Every estate should have at least5% of the land allocated forconstruction of Quarters

    n At least TWO hostels (One for Men

    and one for Women) should beestablished

    n Scheme should include thiscomponent also

  • 8/6/2019 Working Group on MSMEs _ Growth for The

    33/38

    Hospitals/First Aid Clinics

    n We have the ESI schemes for along time

    n The benefits have not reached the

    deserving sectionn All small estates should have an

    ESI dispensary and everyLarge estate should have an

    Hospitaln Building a Dispensary/Hospitalshould be added as acomponent of the Scheme

  • 8/6/2019 Working Group on MSMEs _ Growth for The

    34/38

    Mile Stones to be achieved inthe 12th Five Plan Period

  • 8/6/2019 Working Group on MSMEs _ Growth for The

    35/38

    Mile Stones to be achieved in the 12thFive Plan Period contd.

  • 8/6/2019 Working Group on MSMEs _ Growth for The

    36/38

    Conclusion

    n TANSTIA has done its best to bring variousissues related to Infrastructure which areconfronting the MSEs.

    n Many committees, Groups and Task Forceshave done this exercise many times.

    n What is required is implementation of the

    recommendationsn It requires adequate funding and dedicated

    officers

  • 8/6/2019 Working Group on MSMEs _ Growth for The

    37/38

    Thanks!

    n TANSTIA thanks the Secretary, MSMEand the DC-MSMEDI for giving this

    opportunityn TANSTIA assures its unstinted support

    and cooperation in finding amicablesolutions to the problemsenumerated here.

  • 8/6/2019 Working Group on MSMEs _ Growth for The

    38/38

    Big Thank Youor All