‘Make in India’, ‘Skill India’ and ‘Digital India’ to enable MSMEs attain Exponential Growth: Madhav Lal, Secretary, Ministry of MSME

CII in Partnership with the Ministry of MSME, Government of India organized the Global SME Business Summit 2014. The day one of the event focused on connecting Global SMEs for mutual business development and explore emerging markets. During the event, Mr Madhav Lal, Secretary, Ministry of MSME, discussed the intent of the Government of India and the Ministry of MSME to lead Indian MSMEs on a high growth path. After highlighting the role played by MSMEs in the economic landscape of the country, he spoke about the dual role that the Ministry of MSME plays in assisting MSMEs in terms of providing them with a supportive framework through policy advocacy and by bringing about institutional reforms in areas of policy vacuum including taxation reform, regulatory systems’ reforms, finance provisioning reforms, etc. He shed some light on the recent initiatives of the Prime Minister of India, Mr. Narendra Modi, for support to MSMEs. The most significant measures include the Make in India initiative, Skill India for skill development, Digital India for ICT interventions, etc. He also made a mention of the announcements in the Union Budget 2014-15 for the provision of a Rs 10,000 crore venture capital fund and a Rs 200 crore technology centres fund, accreditation of enterprises in this sector, virtual clusters, online filing of EM I and II, incubation centres, etc. These initiatives make it clear that the government is focused on supporting the MSMEs. He illustrated the need for identifying important verticals within this sector with differing interests with regards to government’s policy interventions and highlighted the merits of adopting a focused approach to benefit these verticals. Mr Madhav Lal inaugurated the 11^th edition of Global SME Business Summit 2014 today in New Delhi.

Mr R C Bhargava, Chairman, Maruti Suzuki India Limited in his Keynote Address, disclosed the role played by MSMEs in assisting Maruti Suzuki in its journey to become the biggest car manufacturing company. He spoke about the diversity of opportunities evolving in the auto components sector for MSMEs. He discussed the role played by Maruti in cluster development, skill formation, etc. He also added that, to make the PM’s call to grow manufacturing a reality different rules and incentives need to be devised for MSME’s working as vendors to modern manufacturing. A capital investment based criteria is inappropriate and in fact creates a disincentive to improving technology, productivity, quality and reducing costs. He said that industry will not become competitive if this persists. This applies not only to auto but aerospace, capital goods, power generating and transmission equipment, consumer durables and so on. The entire package of incentives should lead to enhancing competitiveness of manufacturing, and upgrade of all aspects of their work, commented Mr Bhargava.

The report “The New Wave Indian MSME: An Action Agenda for Growth” was released by Mr Madhav Lal at the Session.

The report “The New Wave Indian MSME: An Action Agenda for Growth” was released by Mr Madhav Lal at the Session. This report suggests an alternative framework for the definition of MSMEs. This report outlines relevant recommendations for an opportunity framework built around five growth enabling pillars comprising: infrastructure, regulatory framework, funding, performance incentives and skill India. It also contains global best practises and is in line with the government’s vision of policy incentives for the MSME sector in India.

Ms Patricia Hewitt, Chair, UK India Business Council, emphasized on building a healthy India UK SME partnership. She explained that through improvements in factors like gaining access to networks and contacts; establishing a dialogue and building a relationship with actors in the market; navigating unfamiliar business environments, including differences in language and culture; procedural barriers such as product standards and other aspects of the legal and regulatory framework; assessing the competitive environment and identifying potential opportunities and risks; etc., the small and medium enterprises of both countries can be enabled to explore and expand their businesses in each other’s domain.

Mr T T Ashok, Co-Chairman, CII National SME Council, shared about the various features of the session which include 8 sectoral sessions on emerging sectors with relevance for SME penetration and internalization, 6 country sessions to explore cross-border partnership opportunities of mutual benefit, the India SME expo showcasing 50 national as well as international SMEs, their products and services and a special National Vendor Development Program with leading CPSEs in India to enable Public Sector Enterprises to identify suitable vendors in the MSE category and to provide SMEs with an opportunity to interact with these CPSEs and cement long term partnerships. He added that looking ahead, the challenge lies in building the next generation of SMEs that will collectively function as the powerhouse of the global economy. To achieve this, governments and industry around the world would need to make many collaborative efforts to create conducive eco-systems for MSMEs within their respective geographies and across regions.

Indian Air Force keen to Involve Indian Industry in Aircraft, Weapon Systems and Electronic Warfare Systems Manufacturing: Air Marshal RK Sharma, Vice Chief of the Air Staff

“Indian Air Force is seeking response from Indian industry to manufacture planes including Avro, P-7 Trainer Aircraft, Weapon Systems, Electronic Warfare Systems and Rotor blades”, said Air Marshal RK Sharma PVSM AVSM VM ADC, Vice Chief of the Air Staff, Indian Air Force while speaking in the 9^th International Conference on Energizing Indian Aerospace Industry jointly organized by CII, Indian Air Force and Centre for Air Power Studies (CAPS).

(L-R) Air Marshal RK Sharma PVSM AVSM VM ADC, Vice Chief of the Air Staff, Indian Air Force; Mr Sujith Harida, DDG, CII; Dr R K Tyagi, Chairman, CII National Committee on Aerospace & Chairman, Hindustan Aeronautics Limited; Air Marshal Vinod Patney SYSM PVSM AVSM VrC (Retd), Director General, Centre for Air Power Studies and; Mr Satish K Kaura, Member CII National Committee on Aerospace & Chairman, Samtel Group in the Inaugural Session of 9th International Conference on Energizing Indian Aerospace Industry.

He further said that Indian Air Force is a stake holder in vibrant and thriving aerospace sector and is committed to its growth. Sustained demand from the Indian Air Force and industry friendly policies are the two important drivers to make Indian aerospace industry a success story. He also emphasized on Public Private Partnership, Joint Venture formation and better mechanisms to absorb technology.

Dr R K Tyagi, Chairman, CII National Committee on Aerospace & Chairman, Hindustan Aeronautics Limited has suggested the formation of an Indian Aeronautics Commission and bring various organizations and institutes currently functioning under different Ministries under one umbrella. “This will ensure greater cohesion, synergy, understanding and speeding-up decision making in defence related activities”, he said.

He also said that it is important to exploit FDI and Joint Venture opportunities for development of indigenous industry in India’s defence and aerospace sector.  “Also, our industry must have greater say in selecting technologies for future platform developments and our offset focus should  be on acquisition of cutting edge technology”, he added.

Air Marshal Vinod Patney SYSM PVSM AVSM VrC (Retd), Director General, Centre for Air Power Studies said that India is the largest importer of defence equipment. To reverse this trend, Government of India has taken several initiatives to ensure a win-win situation for all the stakeholders.

Mr Satish K Kaura, member, CII National Committee on Aerospace and Chairman Samtel Group said that self-reliance is a challenging task. As a nation, we need to have access to aerospace technologies, innovation and the ability to train manpower in aerospace industry. Therefore, co-development and co-production should be the preferred route. Recent joint venture between Indian and foreign companies are some of the indications towards that direction.

Mr Sujith Haridas, DDG, CII said that CII remains committed to facilitate creation of a vibrant domestic aerospace industrial base in the country. CII has already taken proactive step to involve all the stakeholders. More initiatives to create better synergy between Public and Private sectors are in the pipeline.

CII-DGR MoU is a Correct & Historic Step: Arun Jaitley, Raksha Mantri

Mr Arun Jaitley, Hon’ble Raksha Mantri said that the Confederation of Indian Industry (CII) – Directorate General of Resettlement (DGR) Memorandum of Understanding is a significant partnership to build Corporate-Ex Servicemen (ESM) relationship. He was speaking during the Inaugural Session of DGR National Corporate Conclave in New Delhi. Air Chief Marshal Arup Raha, Chief of Air Staff, General Dalbir Singh, Chief of Army Staff, Admiral RK Dhowan, Chief of Naval Staff and Smt Sangeeta Gairola, Secretary Ex-Servicemen Welfare, Ministry of Defence were also present. Mid-career and late career stage jobs are relatively more in the private sector than public sector. Corporate India needs trained mind and personnel. Ex Servicemen constitute a huge resource of trained and disciplined manpower. These men have worked in a different environment. For them commitment to duty is paramount. They show exemplary discipline and very high integrity. They are physically fit and can perform variety of jobs. The existing situation, wherein corporate sector needs men with such qualities and ESM need reemployment, ideally fits into the supply and demand principle of economics. 

He further said that ESM are retired but not tired. Society owes debt and gratitude to ESM. Hinting towards India Inc, he said, it is very important that segment of society come forward and absorb these extremely talented and trained men into jobs. ESM are best suited to run Corporate Social Responsibility (CSR) programmes. He said that, “CII-DGR MoU is the continuation of the act of gratitude and I am fortunate to be associated with this” 

Chief of Staff Committee and Air Chief Marshal, Arup Raha said that since there is a limited scope for the ESM in the government sector post-retirement. On the contrary, private sector has the potential to absorb ESM in huge numbers. He pointed out that CII-DGR partnership would benefit corporate sector as well as ESM. 

Mr Ajai Shriram, President CII said that as per a CII study, the defence and aerospace sector alone has the potential of creating one million new jobs in the country. However, the manufacturing sector requires proactive measures to bridge the skill gap. A meagre 2 % of Indian population is vocationally skilled. In comparison, the ratio is 75% in Germany, 96% in Korea, 80% in Japan and 68% in UK. 

He emphasized that with a vast experience in Skill Development, CII would be happy to work with the Ministry of Defence and help Ex Servicemen to reorient for the second innings either in the industry or as entrepreneurs. Industry is keen to hire talent from the ex-servicemen pool. The focused initiative to promote partnership with Industry would greatly enhance the synergies of industry and ex-servicemen and create the required linkages. 

Mr Chandrajit Banerjee, Director General CII said that with greater participation of the private sector in defense production and permission for enhanced FDI in defense, CII expects a resurgence in defense-related manufacturing and employment creation. Due to the lack of earlier engagement with the sector, industry is missing the skill set required to adequately participate in this policy. CII remains committed to the reemployment of Ex-Servicemen. 

Maj Gen Amrik Singh, Director General Resettlement made and elaborate presentation on various issues related to ESM and DGR initiatives. He emphasized on the strength of CII-DGR partnership and how it will be useful in synergizing the efforts from both sides. 

DGR-CII MOU HIGHLIGHTS 

Looking at the youthful age profile of the retiring service personnel and dearth of suitable manpower in the corporate sector, CII & DGR have decided to partner towards the following & fill this gap. The highlights of MoU are:

• Organising awareness sessions on the availability of skilled Ex-Servicemen for suitable placements in the Industry.
• Conduct webinars to enhance the awareness about the skill sets required for absorption into the Industry.
• Conduct a National Annual Conclave on the subject in New Delhi.
• Circulate the information about the location specific availability of the skilled manpower for the Industry from DGR.
• Support the Job Fairs / Career Facilitation Seminars organized by DGR.
• Institutionalising Award for Corporate as best ESM Employer.
• Assist in formulating a web based DGR Job Portal and its interface with the corporate clients.
• Identify specific skill requirement for industry and preparation of ESM for the same.
• Facilitate CSR mechanism for the corporates.

This memorandum will facilitate employment of ex-servicemen in the industry, especially in SMEs, thereby providing a second career post-retirement and to use the ESM competencies in the growth of corporate.

Recently Announced Policy Reforms would Accelerate Indigenisation: Mr GC Pati, Secretary Defence Production, Ministry of Defence

Mr GC Pati, Secretary Defence Production, Ministry of Defence said that policy reforms like setting up of order of priority of defence procurement from Indian companies, higher FDI cap and liberalized Industrial licensing regime would accelerate indigenization. Components and sub-systems have been taken out of licensing regime. We have significantly reduced entry barriers for the SMEs. Technology Development Fund (TDF) would help SMEs in particular. Mr Pati was speaking in the Inaugural Session of DEFTECH 2014 jointly organized by Confederation of Indian Industry and Centre for Joint Warfare Studies at Defence Research and Development Organisation (DRDO) Headquarters, Rajaji Marg, New Delhi.

Mr Sumit Mazumder, President Designate, CII said that Indian industry both in public and private sector has developed fair amount of capabilities. However, Ministry of Defence should encourage these companies to graduate from their current level to a higher level. This can be made possible if Indian companies are given incentives to acquire state-of-the-art and critical technologies.

Mr Mazumder mentioned that many Indian companies, especially new entrants into defence, are yet to understand the finer details of the Long Term Integrated Perspective Plan (LTIPP) and its public version Technology Perspective Capability Roadmap (TPCR). Ministry of Defence should consolidate the orders for the sake of economy of scales. This move would be beneficial to the End-users as well as industry. MoD’s procurement procedures are still very cumbersome and time consuming. In the best interest of everyone, the procurement cycle should be shortened.

DRDO has done marvelous work despite the technology denial regimes. The good work done by DRDO laboratories should be made available to the Indian industry for productionisation and commercialization.

No businesses can be sustained without exports in the long term. Therefore, Government should take corrective measures to allow defence exports as well as promote exports of defence items from India, said Mr Mazumder.

Broad R&D framework in the defence sector is Long Term Integrated Perspective Planning (LTIPP) & Technology Perspective Capability Roadmap (TPCR) driven. Several incentives are available to the industry including 200 percent tax rebate on R&D investment. We expect industry to come forward and invest in R&D. While responding to the suggestions of Mr Sumit Mazumder, President Designate, CII, Mr Pati said that MoD is taking steps to reduce the procurement cycle and simplifying export policy.
Dr Sudarshan Kumar, Chief Controller Research & Development (CCR&D), DRDO said that if India has to become a global power by 2020 then we need to have a clearly defined roadmap for self-reliance through technology driven indigenization. Technology helps during peace as well as war. During peace it provides deterrence and during war time technology provides an edge over the adversaries. For transfer of technology, R&D base in industry is must. Indian R&D spends are very low compared to the US and China. National initiatives on self-reliance in the form of Self-reliance Mission 2025 having the clearly laid down milestones should be launched. “We should also start working on filling up the technology gaps especially in the areas of engines, materiel and infrastructure and so on,” said Dr Kumar.

Dr PS Ahuja, Director General, Council of Scientific and Industrial Research (CSIR) said that defence technology has been at the centre of civilizational change. Internet, Space Exploration and Atomic Energy are few of the important examples. Defence technology is the biggest money earning machine in the world. 16 CSIR laboratories have been associated with defence research. CSIR labs have contributed in Tejas, BrahMos and Drushti programmes of DRDO. Dr Ahuja said that “We need to get together to leverage existing technologies and capabilities in the country.” There is a need to integrate capacities, knowledge base and industrial strengths to PPP mechanism. Bangalore with the presence of DRDO Laboratories, HAL, BEL, private industry and several research institute is a good example of the existing eco-system in the country. This eco-system should be replicated in the other parts of the country as well.

Maj General (Retd) K B Kapoor, Director, Centre for Joint Warfare Studies said technology has both hard and soft components. Whilst India is very strong as far as soft components are concerned, India still lacks in the hard components of technology which necessarily means military hardware. Long Term Integrated Perspective Planning (LTIPP) & Technology Perspective Capability Roadmap (TPCR) have laid down the requirement of the Indian Armed Forces for the next 15 years.