Lok Sabha Question No. 202 (UNSTARRED), answered on 2015-11-30
Subject: Assistance to MSME Clusters
Ministry: MICRO,SMALL AND MEDIUM ENTERPRISES
Asked by: PRALHAD VENKATESH JOSHI

## GOVERNMENT OF INDIA

## MINISTRY OF MICRO, SMALL AND MEDIUM ENTERPRISES

## LOK SABHA UNSTARRED QUESTION NO: 202 TO BE ANSWERED ON 30.11.2015.

## ASSISTANCE TO MSME CLUSTERS

## 202. SHRI PRALHAD JOSHI:

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

- (a) whether the 'The Energy and Resources Institute' (TERI) has recently conducted any  study  regarding  problems  being  faced  by  the  Micro,  Small  and  Medium  Enterprises (MSME) clusters in the country particularly Hubli-Dharwad clusters;
- (b) if so, the details thereof, State / UT-wise; and
- (c) the corrective steps taken by the Government in this regard including enhancing the number of skilled labour and modernization of the MSME Clusters?

## ANSWER

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

- (a): Yes,  Madam.  As per the information furnished by the 'The Energy and Resource Institute' (TERI), the  study has been conducted regarding the problems being faced by the Micro, Small and Medium Enterprises (MSME) clusters  in the country particularly HubliDharwad Cluster;
- (b): In  Hubli-  Dharwad  region,  study  has  been  carried  out  in  automotive  component  / engineering cluster. The main objective of the study was to identify infrastructure and non financial (technology, skill, marketing, energy / environment, quality /productivity etc.) gaps and  recommend solutions  to  overcome  the  gaps.  A  brief  of  the  problems    indentified  and solutions recommended by TERI for Hubli- Dharwad cluster is stated below:

| Areas          | Problem                                                                                                                   | Suggested Solution                                                                                                    |
|----------------|---------------------------------------------------------------------------------------------------------------------------|-----------------------------------------------------------------------------------------------------------------------|
| Infrastructure | Raw materials like SS / MS rods for forging are not available locally.                                                    | Explore strengthening raw material procurement / supply.                                                              |
| Marketing      | Few OEMs in the cluster. Higher rate of taxation (VAT) in the state make products uncompetitive compared to other states. | Organize buyer-seller meets. Promote policy dialogue between industry association and Department of Commercial Taxes. |
| Skill set      | Lack of basic engineering drawing knowledge among entrepreneurs and draftsmen.                                            | Organize training program on engineering drawing in collaboration with local academic institutes                      |

| Product quality     | Few units have implemented TQM                                                                                                                                                                                                         | Implement TQM tools in selected units on a pilot basis. Encourage units to use DC- MSMEs Lean manufacturing scheme   |
|---------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------|
| Technology          | Limited facilities for laser cutting / CNC frame cutting in the cluster. No VMC (Vertical Milling Centre) in the cluster and SMEs using three operations (lathe, vertical machining and milling) which is leading to low productivity. | Support vendors in laser /CNC frame cutting. Support vendors equipped with VMC.                                      |
| Product development | Limited product development capacity among SMEs                                                                                                                                                                                        | Establish technology tie-ups with international firms.                                                               |

The studies conducted recently by TERI in the clusters, State /UT- wise are:

|   No. | Cluster                      | MSMEsub-sector       | State                      |
|-------|------------------------------|----------------------|----------------------------|
|     1 | Hubli-Dharwad                | Engineering / Auto   | Karnataka                  |
|     2 | Rajkot                       | Engineering /Foundry | Gujarat                    |
|     3 | Ankleshwar                   | Chemical             | Gujarat                    |
|     4 | Kolhapur                     | Foundry              | Maharashtra                |
|     5 | Mohali-Chandigarh- Panchkula | Engineering          | Punjab/ Chandigarh/Haryana |
|     6 | Kerala                       | Rubber               | Kerala                     |

(c):   For enhancing the number of skilled labour and modernization of the MSE Clusters, the Government has implemented several schemes such as Micro and Small Enterprises Cluster Development  Programme  (MSE-CDP),  Lean  Scheme,  Quality  Management  and  Quality Technology  Tools  (QMS/QTT),  Design  Clinics  etc.  In  the  Auto  Cluster,  Dharwad,  Hubli many  facilities  have  been  setup;  one  of  the  facilities  is  skill  development  training  for enhancing the number of skilled labour. Further, latest machines and equipments have been setup in the Common Facility Centre (CFC) for precision machining, manufacture of Jigs and fixtures etc. which in turn would result in modernisation of the cluster.

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