Transcript 鞀 澕鞚措摐 1 - :: Welcome To IICA

Evolving Need to use Technology
Infusion in the MSME Sector &
the Barriers
Presented by:
Shri P. Udayakumar
Director (Planning & Marketing)
National Small Industries Corporation
MSMEs: Engines of Growth
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MSMEs account for about 45% of India’s manufacturing output.
MSMEs account for 95% of the industrial units.
MSMEs account for about 40% of India’s total exports.
The sector is projected to employ about 73 mn people in more than
31 mn units spread across the country.
MSMEs manufacture more than 6,000 products ranging from
traditional to high tech items.
20 % Procurement Policy from MSEs by PSUs and Govt
Defence Offset Policy with 1.5 times multiplier and indigenisation
FDI in Retail with optional sourcing from MSMES
Classification of MSMEs: Based on investment
in Plant & Machinery
MANUFACTURING SECTOR
Micro Enterprises
Does not exceed Rs. 25 Lac
(USD 40500)
Small Enterprises
More than Rs. 25 Lac (USD
40500) but does not exceed
Rs. 5 Crore (USD 810000)
Medium Enterprises
More than Rs. 5 Crore (USD
810000) but does not exceed Rs.
10 crore (USD 1620000)
SERVICE SECTOR
Micro Enterprises
Does not exceed Rs. 10 Lac
(USD 16200)
Small Enterprises
More than Rs. 10 Lac (USD
16200) but does not exceed
Rs. 2 Crore (USD 324000)
Medium Enterprises
More than Rs. 2 Crore
(USD 324000) but does not
exceed Rs. 5 Crore (USD 810000)
Issues & Challenges : For the MSME sector
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Enhancing the credit limit to MSMEs
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Issue of collateral securities
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Higher interest rates as compared to other countries
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Delayed payment issues despite an Act
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Longer registration process (35 days in India) whereas some
countries do it in 2 days
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Multiple registration for MSMEs (VAT, CST, Excise, PAN, Service Tax,
IEC etc.)
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Outdated Acts like- Contract Act, Factories Act, Central Labour Act,
EPF, ESI, Land Acquisition Act, Industrial Disputes Act, Insolvency
Act
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Very poor ranking in the Ease of Business index (142)
Contd….
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Multiple legal entities without scale of economy to seek exemptions
and regulatory compliances
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Changing production systems
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Increase in FDI in Defence/ Insurance/ Railways/ Infrastructure
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Youth population 300 Million whereas job availability only 100
Million
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Only three out of ten employable due to lack of skills
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Need for time bound tax exemption/relaxation for start-ups
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Lower investment limit for MSMEs creating hurdles in technology
up gradation and capacity build up
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Increasing trend in online marketing and absence of regulatory
framework
Contd….
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Multiple legal entities without scale of economy to seek exemptions
and regulatory compliances
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Changing production systems
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Increase in FDI in Defence/ Insurance/ Railways/ Infrastructure
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Youth population 300 Million whereas job availability only 100
Million
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Only three out of ten employable due to lack of skills
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Need for time bound tax exemption/relaxation for start-ups
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Lower investment limit for MSMEs creating hurdles in technology
up gradation and capacity build up
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Increasing trend in online marketing and absence of regulatory
framework
Access to Technology in the MSME sector
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Out of total MSMEs in the country, 95% are Micro and only 5% are
Small & Medium category enterprises.
Technology adoption in case of Micro enterprises is very poor &
not feasible due to investment limit and an area of concern.
No technology banks and poor IPR/Patent Registration habit
Multiple agencies like CSIR,DRDO,ICMR working in compartments
Though India has a vast pool of technical talent with a well
developed intellectual infrastructure, the country still scores low in
the matter of developing and adapting new technologies in the
MSME sector.
Lower investment ceilings for the MSMEs and Tax concessions to
remain as MSMEs
Futuristic sectors like IT, ICT, Defence, Renewable energy etc. are
capital intensive sectors requiring huge investments.
Need for change in the criteria for classification of MSMEs- a
separate category may be introduced to bring in technology
oriented units.
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Need for technology infusion in the MSME sector
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Technology is the foremost factor for enhancing the global
competitiveness of the Indian MSME sector
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Govt. planning to invest in sustainable development.
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Vast market opportunity to the tune of $1.6 trillion waiting to be
seized in Clean Technology in the developing countries.
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Large scale investments in Defence ,Infrastructure ,Inland
Security with Off set provisions and multiplier effect.
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Demographic dividend- key to success for India possible only
thro Technology adoption.
Make in India Campaign
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The 'Make in India' campaign is aimed at making India a
manufacturing hub, and the government is pulling out all the stops for
ensuring a smooth sailing for investors, by setting up a dedicated cell
to answer queries of business entities within 72 hours. It will also
closely monitor all regulatory processes to make them simple and
reduce the burden of compliance. Here ,the technology is the Key.
DEFENCE ANCILIARY FROM MSME-A DISTANT
REALITY ?
Multiplier of 1.50 : Avenues for Discharge : IOP
Categor
y
Manufacture (Plant & Machinery)
Micro
Less than or equal to Rs. 2.5 millio
n
Small
Greater than Rs. 2.5 million but not Greater than Rs. 1 million but not mor
more than Rs. 50 million
e than Rs. 20 million
Medium
Greater than Rs. 50 million but not
more than Rs. 100 million
Services (Equipment)
Less than or equal to Rs. 1 million
Greater than Rs. 20 million but not mo
re than Rs. 50 million
►OEM’s are now being incentivized to pick up SME’
s. In turn the OEM’s will have to work harder to e
nsure the SME’s will be able to meet the global aer
ospace quality standards.
►SME’s would be provided a better chance of winn
ing orders in comparison to the large-established
players.
INTERNAL SECURITY MARKET IN INDIA
KEY INSIGHTS
Total Internal Security spending
in the Indian market under all
the 8 threat domains is
expected to amount to a total
of US $9.7 bn by the year 2016
Over the past five years, private
security business in the country
has grown at a CAGR of 25% to
reach an
estimated value
of USD2 bn
81.4% of all Internal Security
spending by the year 2016 will
be focussed on mass transport
security, airport
security
and maritime security
EY has limited or no presence
in
these areas
CONTD...
Naxalsim /
Insurgency
Money
Laundering
Human
Traf f icking
Inf ilt rat ion
Restraints
Drivers
Terrorism
Increased threat
perception across
all threat domains
Int ernal and
Ext ernal
Threat s
Liberalisation and op
ening up of Market to
Private Players
Manpower intensive
Budgetary
security measures
Constraints
Prosecution
Cyber
At t acks /
Crime
Growth of Indian
Economy
India’s homeland security
agencies received a substantial
25% y-o-y increase in their
budgetspending for 2009–10 vs
only Approx 3% increase in the
Defence Budget.
In 2009–10, Paramilitary forces
were allocated USD 4.3 Billion
as against USD3.4 billion in
2008–09.
Additional amount of USD 100
Million is being proposed for
modernization of police forces
in the current year.
Additional amount of USD 500
Million is being provided for
construction of fences, roads etc.
on the international borders.
Delhi Police was allocated USD
1.5 Billion for Commonwealth
Games Delhi 2010 security
requirements.
INTERNAL SECURITY MARKET IN INDIA
PRIVATE SECTOR
The CISF has close to 100 pending
requests for security cover. It has
recently received approval from the
MHA to raise additional manpower to
the tune of 400,000.
India has emerged as the largest and
most preferred Outsourcing location.
NASSCOM had carried out an
extensive survey on the IT Security
requirements for Outsourcing
facilities. However only 5% of the
centers in India have actually
implemented the same.
Nearly 10% of the Private Firms
evaluate
the IT Security of their
3rd Party Vendors.
INFOSYS Technologies became the
first
private company to receive
CISF cover in
November 2009, for
its Bangalore facility alone it is
spending US$0.6 million/annum.
The Reliance group has begun
operations of India’s first Privately
run Metro rail service- Delhi Airport
Express line.
The Security market is growing at the rate of 23% CA
GR and could potentially hit 40% by 2016. In 2009,
the spending reached a level of US$ 1B
Refineries
Banks /
Financial
Institutions
Malls /
Retail
Industry
Hotels /
Leisure
Consumers
SPACE/OCEAN
 ISRO / BRAHMOS IN THE PROCESS OF DEVELOPING
TECHNOLOGIES/EQUIPMENTS FOR SOLAR MISSIONS
 TECHNOLOGY AND EQUIPMENTS DEVELOPMENT ARE
UNDER PROTO TYPE STAGE.
 PLANNED TO EXPLORE AND EXTRACT MINERALS AND
RESOURCES FROM OTHER PLANETS BY 2030-50
VENDOR
DEVELOPMENT
/ANCILLARIES
TO
BE
DEVELOPED THRO’ SMEs
EXTRACTION OF MENERALS AND SEA BED METHANE
USING ADVANCED TECHNOLOGIES WHICH NEED
VENDORS.
R&D ACTIVITIES ,TECHNOLOGY TRANSFERS /BANKS
TO BE CREATED
KEY STATISTICS IN ENERGY
 India has been consistently ranked among the top
five countries (globally) in terms of its market
potential for renewable energy.
 The Renewable Energy (RE) industry is expected
to grow at a high rate in the Twelfth Five Year
Plan period (2012 – 2017).
 With power generation from renewable sources
on the rise in India, share of renewable energy in
country’s total energy mix increased from 7.8% in
financial year 2008 to 12.1% in financial year
2012.
 India had around 26 GW of installed renewable
energy capacity as on August 31, 2012 and plans
to more than triple its renewable energy capacity
in the next 10 years, driven mainly by wind and
solar energy.
Government Initiatives
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Allocation of Rs. 100 Crore to set up the Technology Development
Fund to Public and private companies include SMEs to support and
develop the Defence sector and cutting-edge technologies is going
to help the core MSMEs in accessing global technologies and make
them compete at a global scale.
Thrust on Manufacturing and improving the Ease of Doing Business
index to 50 from 142
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Rs. 10000 Crore venture capital fund to be set up for MSME sector.
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Definition of MSME to be revised for high capital ceiling.
Increase of FDI to 49 % in Defence and FDI in Railways
Simplification of FDI investments in Infra Projects
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THANK YOU
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