‘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.

Air Force to procure equipment and platforms worth USD 150 billion dollars in the next 15 years: Air Marshal PP Reddy

Air Marshal PP Reddy VM, DG (Inspection & Safety), Indian Air Force said that Indian Air Force is going to procure equipment and platforms worth USD 150 billion dollars in the next 15 years while speaking in the Inugural Session of 8^th International Conference on Energising Indian Aerospace Industry co-organised by Confederation of Indian Industry, Centre for Air Power Studies in association with Indian Air Force in New Delhi. Aircrafts, engines and equipments absorb the major chunk of capital budget. Indian Air Force’s revenue budget is INR 18900.36 Crore for the year 2013-14. He further said that Indian industry requires tax holidays and more industry friendly import and export regimes. R&D funds should also be made available to the private sector companies.

Mr S K Mittal, General Manager, Business Development, Hindustan Aeronautics Limited said that Hindustan Aeronautics Limited has 2400 suppliers. However all of them are Tier 3 suppliers. There is a need to have Tier 1 and Tier 2 suppliers. He further said that the best of the aerospace technologies cannot be parted with but these have to developed. Majority of the raw material is being imported and this trend needs to be reversed. Certification of airworthiness is also a challenge.

Air Marshal Vinod Patney SYSM PVSM AVSM VrC (retd) Director, CAPS  said that India can’t become major power without flourishing aerospace industry. SMEs have not enjoyed the benefits of defence offsets and government support. Therefore, SMEs should get due attention from the government as well as large scale companies. The business model must undergo change. Transfer of technology and licensed production should be looked at as a stop gap arrangement. FDI limit should be relaxed and private sector’s greater involvement is required.

Mr Satish Kaura, Co-Chairman CII National Committee on Defence and Aerospace & Chairman Samtel Group said that we need to have effective mechanism for Transfer of technology in place. Thereupon we will have to focus on capacity building with aim of emerging as defence & aerospace export hub. We will have to make sure that Indian SMEs should become a part of the global supply chains of major defence equipment producers by leveraging the cost arbitrage in component designing and manufacturing in India.

Mr Anjan Das, Executive Director said that R&D constitutes a negligible portion of the overall spend of any Indian companies. The tax rebate needs to be more broad based and should also cover cost involved beyond laboratories as well. All the stakeholders should give more priority to Aerospace and Defence manufacturing. Tie ups with foreign OEMs are important for meeting the modernization requirements of the Indian Armed Forces.