India: SME Contribution to Employment Increased Threefold

Mar 2015
India, March, 10 2015 - The total employment in the Micro, Small and Medium Enterprise (MSME) sector has increased over three times to 805.24 lakh in the Fourth All India Census of Small Scale Industries as compared to 249.33 lakh in the Third MSME Census.

This information was given by the Minister of State, Micro, Small and Medium Enterprises, Giriraj Singh in a written reply to a question in Lok Sabha in New Delhi on Monday.

The Government monitors the employment in the MSME sector in the country by conducting All India Census of the sector, periodically. As per the latest Census (Fourth Census), conducted (with base reference year 2006-07), wherein the data was collected till 2009 and results published in 2011-12, as well as data extracted from Economic Census 2005 conducted by by Central Statistics Office (CSO), Ministry of Statistics and Programme Implementation (MoSPI), for activities excluded from Fourth Census, namely wholesale/retail trade, legal, educational & social services, hotel & restaurants, transports and storage & warehousing (except cold storage); the total employment in the sector increased to 805.24 lakh as compared to 249.33 lakh in the Third All India Census of Small Scale Industries, conducted with reference year 2001-02, which is seen growing at 26.42 percent annually, taking into account additional coverage under the sector, said Singh.

MSME sector employs close to 40 percent of India's workforce and contributing 45 percent to country's manufacturing output, MSMEs play a critical role in generating millions of jobs, especially at the low-skill level.

As per the revised methodology suggested by CSO, MoSPI, on the basis of the data on Gross Domestic Product (GDP) published by CSO, MoSPI and final results of the latest Census (Fourth Census), conducted (with base reference year 2006-07), wherein the data was collected till 2009 and results published in 2011-12, the estimated contribution of MSME sector (including service segment) to GDP during 2010-11, 2011-12 &2012-13 are 36.69 percent, 37.97 percent & 37.54 percent respectively.

The estimated contribution of manufacturing MSME output in manufacturing output of the country during 2010-11, 2011-12 & 2012-13 are 38.50 percent, 37.47 & 37.33 percent respectively.

Based on the export data maintained by Director General of Commercial Intelligence & Statistics, Ministry of Commerce and the information available with this Ministry about MSME products having significant export, the share of MSME in India’s total export, for the year 2011-12, 2012-13 and 2013-14, has been estimated as 43.00 percent, 43.00 percent and 42.40 percent respectively.

Government aims to increase the growth and performance of the MSME sector by implementing various schemes / programmes on regular basis.

The major schemes / programmes are Prime Minister's Employment Generation Programme, National Manufacturing Competitiveness Programme, Credit Guarantee Scheme, Credit Linked Capital Subsidy Scheme, Cluster Development Programme, Market Development Assistance Scheme, and Vendor Development Programme for Ancillarisation.

In another reply, the minister said informed that as per the Prime Minister's Task Force Report on MSMEs (2010), the banks shall have to achieve 20 percent year-on-year growth in credit to micro and small enterprises (MSEs), 10 percent annual growth in the number of micro enterprise accounts and also have to allocate 60 percent of the MSE advances to the micro enterprises.

The fulfillment of these provisions is being regularly monitored by the Reserve Bank of India and Government of India.

In addition, to facilitate easy flow of Collateral free credit to Micro, Small and Medium Enterprises (MSMEs), the Government has been operating Credit Guarantee Fund Scheme for Micro and Small Enterprises.

The Reserve Bank of India (RBI) has also issued guidelines for banks to mandatorily dispense with collateral requirement for loans upto Rs.10.00 lakh to MSEs. The Ministry also implements Prime Minister's Employment Generation Programme and Credit Linked Capital Subsidy Scheme, wherein margin money and capital subsidy are given to bring down the effective cost of loan.

The Government is promoting MSME sector units which are self financed or funded by non-institutional sources through Marketing Development Programme, Cluster Development Programme, Entrepreneurship Development Programmes and National Manufacturing Competiveness Programme etc.

Ministry of Micro, Small and Medium Enterprises does not have a proposal to extend the Joint Liability Mechanism to MSMEs. Joint Liability Mechanism has utility in a set up of Micro Finance Programmes and Ministry of MSME does not currently have a Scheme on Micro Finance.

Source : SME Times

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