Lok Sabha Question No. 2813 (UNSTARRED), answered on 2021-08-05
Subject: Crisis in MSME Sector
Ministry: MICRO,SMALL AND MEDIUM ENTERPRISES
Asked by: Ravneet Singh

## GOVERNMENT OF INDIA

## MINISTRY OF MICRO, SMALL AND MEDIUM ENTERPRISES

## LOK SABHA UNSTARRED QUESTION No. 2813 TO BE ANSWERED ON 05.08.2021

## Crisis in MSME Sector

## 2813.                SHRI RAVNEET SINGH BITTU:

Will  the  Minister  of  MICRO,  SMALL  AND  MEDIUM  ENTERPRISES  be pleased to state:

- (a) whether  the  Government  is  aware  that  the  MSME  Sector  in  the  country  including  the sewing  machines,  bicycles,  auto  parts  and  garments  industry  in  Ludhiana,  Punjab  are  facing  a huge financial crisis and if so, the details thereof;
- (b) whether the Government has any proposal to slash the high GST slab of 28 per cent on auto parts in the near future and if so, the details thereof;
- (c) whether the Government is planning to provide any special financial  package including deferment of EMIs and the interest on the loans etc. to help these industries in the MSME sector especially in Ludhiana, Punjab which are facing financial distress: and
- (d) if so, the details thereof and if not, the reason therefor?

## ANSWER

## MINISTER OF MICRO, SMALL AND MEDIUM ENTERPRISES (SHRI NARAYAN RANE)

(a): COVID-19 pandemic has temporarily affected various sectors including Micro, Small and Medium  Enterprises  in  the  country.  Economic  activity  contracted  due  to  the  strict  lockdown measures  imposed  by  the  Government.  This  contraction  had  impact  on  the  sewing  machines, bicycles, auto parts and garments industry of Ludhiana also.

An  online  Portal  'Champions'  has  been  launched  on  01.06.2020  by  Hon'ble  Prime Minister. This covers many aspects of e-governance including grievance redressal and handholding of MSMEs. Through the portal, total 36,738 grievances have been redressed upto 03.08.2021  and  21  such  grievances  received  on  sewing  machines,  bicycles,  auto  parts  and garments industry on the champion portal and were addressed.

As per Udyog Aadhaar Portal (since inception October 2015 to June 2020), the number of Micro, Small and Medium Enterprises (MSMEs) registered in All India under National Industrial classification codes 27400 Manufacture of Electric Light equipment (Sewing machine) are 21,962 and  under  classification  code  of  2008,  '3092'  Manufacture  of  bicycles  and  invalid  carriages category  was  4,703  and  under  code  29301  Manufacture  of  Auto  parts  are  6,568  and  under classification code 14101 Manufacture of all types of textile garments and clothing accessories are 2,18,232 .

On 1 st July,  2020, after  adoption of new definition of MSMEs, a new registration portal 'Udyam Registration'  has  been launched  by  M/o  MSME  and the  number  of Micro,  Small  and Medium  Enterprises  (MSMEs)  registered  in  All  India  under  National  Industrial  classification codes 27400 Manufacture of Electric Light equipment (Sewing machine) are 12,207 and under classification  code  of  2008,  '2537'  Manufacture  of  bicycles  and  invalid  carriages  category  and under  code  29301  Manufacture  of  Auto  parts  are  9589  and  under  classification  code  14101 Manufacture of all types of textile garments and clothing accessories are 87,729 and so far 2537 MSMEs  are  registered  under  NIC  2008  Code  (3092)  Manufacture  of  bicycles  and  invalid carriages category.

(b): The decision of slashing the GST slab is decided by GST Council. This Ministry does not have any such information.

(c) & (d): Under  Special  Financial  package,  the  Ministry  of  MSME  implements  various schemes  and  programmes  for  growth  and  development  of  MSME  Sector  including  Bicycle, Sewing  machine,  Auto  parts  and  Garment  Industries  in  the  country.  These  schemes  and programmes  include  Interest  Subvention  Scheme  for  Incremental  Credit  to  MSMEs,  Credit Guarantee  Scheme  for  Micro  and  Small  Enterprises,  Micro  and  Small  Enterprises  Cluster Development  Programme  (MSE-CDP),  Credit  Linked  Capital  Subsidy  and  Technology  Upgradation Scheme (CLCS-TUS).

Post Covid-19, Government has taken a number of initiatives under Aatma Nirbhar Bharat Abhiyan to support the MSME Sector in the country especially in Covid-19 pandemic. Some of them are:

- i)    Rs 20,000 crore Subordinate Debt for MSMEs.
2. ii)   Rs. 3 lakh crores Collateral free Automatic Loans for business, including MSMEs.
3. iii)  Rs. 50,000 crore equity infusion through MSME Fund of Funds.
4. iv)  New revised criteria for classification of MSMEs.
- v)   New Registration of MSMEs through 'Udyam Registration' for Ease of Doing Business.
6. vi)  No global tenders for procurement up to Rs. 200 crores, this will help MSME.

Under Infrastructure support package, the Ministry of MSME  implements  Cluster Development Programme (MSE-CDP) for the development of MSMEs, the following Common Facility  Centres  (CFCs)  have  been  established  in  Punjab.  These  CFCs  have  facilities  for computerized product designing and CNC machining for production of engineering items which can be utilized by Bicycle industry of Punjab.

| Common Facility Centre set up MSMEMinistry in the State of Punjab   | Common Facility Centre set up MSMEMinistry in the State of Punjab   | Common Facility Centre set up MSMEMinistry in the State of Punjab   | Common Facility Centre set up MSMEMinistry in the State of Punjab   | Common Facility Centre set up MSMEMinistry in the State of Punjab   |
|---------------------------------------------------------------------|---------------------------------------------------------------------|---------------------------------------------------------------------|---------------------------------------------------------------------|---------------------------------------------------------------------|
| S. No.                                                              | Name of CFC                                                         | Year of Completion of CFC                                           | Total project cost (Rs. in lakh)                                    | GoI grant (Rs. in lakh)                                             |
| 1.                                                                  | CFC in Oil Expeller & Parts Manufacturing Cluster, Ludhiana         | December, 2020                                                      | 1518.68                                                             | 1335.63                                                             |
| 2.                                                                  | CFC in Hi-Tech Cluster, Mohali                                      | November, 2020                                                      | 1407.69                                                             | 1099.39                                                             |

Tool  Room,  Ludhiana  has  facilitated  Bicycle  Industries  of  Ludhiana  during  Covid-19 period by providing Tool Room services as mentioned below

- a) Design validation of bicycle  mud guard design through 3D printing
- b) Machining of tools for chain wheels
- c) Design and Development of press tool for c- clamp of bicycle saddle
- d) Heat treatment of Dies of B Cup,  Aluminium Cycle frame, Gear hub spring, Dies of Cycle   Fork, Die/Punch of Free Wheel.
- e) Raw Material testing
- f) Placement assistance through trainees.

*****