Lok Sabha Question No. 2678 (UNSTARRED), answered on 2016-03-14
Subject: Promotion of MSME
Ministry: MICRO,SMALL AND MEDIUM ENTERPRISES
Asked by: NISHIKANT  DUBEY, RAVINDRA KUMAR PANDEY, ANSHUL VERMA, RAJESHBHAI NARANBHAI CHUDASAMA, N.K. PREMACHANDRAN, BHARTRUHARI MAHTAB, E. AHAMED, DEVJI MANSINGRAM PATEL, Pratyusha Rajeshwari Singh, BHAVANA GAWALI (PATIL)

## GOVERNMENT OF INDIA MINISTRY OF MICRO, SMALL AND MEDIUM ENTERPRISES

## LOK SABHA UNSTARRED QUESTION NO. 2678 TO BE ANSWERED ON 14.03.2016

## PROMOTION OF MSME

2678.  SHRI NISHIKANT DUBEY:

SHRI RAVINDRA KUMAR PANDEY:

SHRI ANSHUL VERMA:

SHRI RAJESHBHAI CHUDASAMA:

SHRI N.K. PREMACHANDRAN:

SHRI BHARTRUHARI MAHTAB:

SHRI E. AHAMED:

SHRI DEVJI M. PATEL:

SHRIMATI PRATYUSHA RAJESHWARI SINGH:

SHRIMATI BHAVANA PUNDALIKRAO GAWALI PATIL:

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

- (a) whether the Government proposes to introduce new schemes/programmes for promotion of  the  Micro,  Small  and    Medium  Enterprises  (MSMEs)  sector  in  the  country,  if  so,  the details thereof including the funds allocated/utilised for the purposes during each of the last three years and the current year, State-wise;
- (b)   whether the Government proposes to extend more financial assistance to the MSMEs in the country, if so, the details thereof including the steps taken by the Government to ensure adequate and timely disbursal of funds by the banks, State-wise;
- (c)   whether  the  Government  also  proposes  to  introduce  new  schemes  for  providing sufficient raw materials to the MSMEs, if so, the details thereof; and
- (d) the  details  of  initiatives  taken  by  the  Government  for  growth  of  the  MSMEs  sector under the 'Make in India' programme?

## ANSWER

## MINISTER OF STATE IN THE MINISTRY OF MICRO, SMALL AND MEDIUM ENTERPRISES (SHRI GIRIRAJ SINGH)

- (a): Ministry  of  Micro,  Small  and  Medium  Enterprises  (MSME)    has  taken  following initiatives for promotion of MSME's and to enable ease of doing business:

Under  Udyog  Aadhaar  Memorandum  (UAM)  Ministry  has  notified  a  simple  one-page registration Form UAM on 18.09.2015.  This is an important step to promote ease of doing business for MSMEs in India as the UAM replaces the filing of Entrepreneurs' Memorandum with  the  respective  States/UTs.    The  information  sought  is  on  self-certification  basis,  no supporting documents are required at the time of online filing of UAM and no fees for UAM registration.

The Framework for revival and rehabilitation of MSMEs was notified by the Ministry on 29.05.2015 which provides a mechanism for revival and rehabilitation with a definite voice to the  Entrepreneurs  and  is  expected  to  balance  the  interest  of  debtors  and  creditors.    The framework enables Banks/creditors to identify MSME's which are in the stage of initial stress and take corrective action to prevent them from becoming NPA's.  MSMEs can seek revival and rehabilitation benefit through a committee constituted by banks with representative from State Governments, experts and others.

A Scheme for Promoting Innovation, Rural Industry and Entrepreneurship (ASPIRE) was launched on 18.3.2015 to promote Innovation & Rural Entrepreneurship through rural Livelihood  Business  Incubator  (LBI),  Technology  Business  Incubator  (TBI)  and  Fund  of Funds for start-up creation in the agro-based industry. During the year 2015-16, 22 LBIs & 2 TBIs have been approved and two LBI Centres have been operationalized at Deoria (U.P.) and Rajkot (Gujarat).

Ministry of MSME is also implementing various schemes and programmes for promotion and development  of  MSME  sector.  The  major  schemes/programmes  include  Prime  Minister's Employment  Generation  Programme  (PMEGP),  Scheme  of  Fund  for  Regeneration  of Traditional  Industries  (SFURTI),  Credit  Guarantee  Scheme, Credit  Linked Capital Subsidy Scheme  (CLCSS),  National  Manufacturing  Competitiveness  Programme,  Micro  &  Small Enterprises -Cluster Development  Programme  (MSE-CDP),  Marketing  Development Assistance, Skill Development Programmes, International Cooperation Scheme, etc.

The details of funds allocated and utilized during last three years and current year for plan schemes are as under:-

(Rs. in crore)

| Year    |   Budget Estimates | Utilization/ Expenditure   |
|---------|--------------------|----------------------------|
| 2012-13 |            2835    | 2229.52                    |
| 2013-14 |            2977    | 2272.05                    |
| 2014-15 |            3327    | 2384.57                    |
| 2015-16 |            2612.51 | 1913.73*                   |

*provisional till 29.2.2016

(b): Ministry  of  MSME's  Budget  allocation  which  was  Rs.2612.51  crore  (2015-16)  has been enhanced to Rs.3000 crore (2016-17).  This enhancement is 15% more than the previous year.    In  terms  of  the  recommendations  of  the  Prime  Minister's  Task  Force  on  MSMEs (2010) chaired by the Principal Secretary to Hon'ble Prime Minister, the RBI has advised the banks, inter alia, the bank shall have to achieve a 20% year-on-year growth in credit to micro and small enterprises, allocation of 60% of the MSE advances to the micro enterprises and 10% annual growth in number of micro enterprise accounts.

To facilitate easy flow of credit to Micro, Small and Medium Enterprises (MSMEs), a Credit Guarantee Fund Scheme  for Micro and Small Enterprises (MSEs)  is being implemented under which guarantee cover is provided for collateral free credit extended to MSEs.    The  Reserve  Bank  of  India  (RBI)  has  issued  guidelines  in  May  2010,  which mandatorily  require  banks  to  dispense  without  collateral  requirement  for  loans  upto  Rs.10 lakh to MSEs.

(c): National  Small  Industries  Commission  (NSIC)  under  the  Ministry  of  MSME  is implementing the Raw Material Assistance Scheme which aims at helping MSEs by way of financing  the  purchase  of  Raw  Material  (both  indigenous  &  imported).  Benefits  under  the scheme include the following:

- 1) Financial Assistance for procurement of Raw Material upto 90 days.
- 2) MSEs helped to avail Economics of Purchases like bulk purchase, cash discount, etc.
- 3) NSIC takes care of all the procedures, documentation & issue of Letter of Credit in case of imports.

(d): In  addition  to  ASPIRE,  Government  is  implementing  the  following  schemes  for growth of the MSMEs sector under the 'Make in India' programme:

Prime  Minister's  Employment  Generation  Programme  (PMEGP)  is  a  credit  linked subsidy  scheme,  for  setting  up  of  new  micro-enterprises  and  to  generate  employment opportunities  in  rural  as  well  as  urban  areas  of  the  country  through  KVIC,  State  Khadi  & Village  Industries  Board  (KVIB)  and  District  Industries  Centre  (DIC).    General  category beneficiaries can avail of margin money subsidy of 25% of the project cost in rural areas and 15% in urban areas. For beneficiaries belonging to special categories such as SC/ST/Women/PH/Minorities/Ex-Servicemen/NER,  the  margin  money  subsidy  is  35%  in rural  areas  and  25%  in  urban  areas.  The  maximum  cost  of  projects  is  Rs.25  lakh  in  the manufacturing sector and Rs.10 lakh in the service sector.  Since inception and up to January 2016, 3.50 lakh micro enterprises have been set up by utilizing margin money amounting to Rs.7004.40 crore.  29.82 lakh jobs have been created from these units.

Scheme of Fund for Regeneration of Traditional Industries (SFURTI) was launched in 2005-06  for  making  Traditional  Industries  more  productive  and  competitive  by  organizing the  Traditional  Industries  and  artisans  into  clusters.    26  clusters  have  been  granted  final approval with a total project cost of Rs.72 crore benefiting around 25000 artisans.

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