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The government’s interventions for promoting small enterprises are plagued by a lack of contemporary data and an overt focus on activity in the manufacturing sector, a top official from the micro, small and medium enterprises ministry said, urging firms to upload their operational data on a newly created data-bank.
According to the sixth economic census of enterprises in India, there are 5.8 crore such enterprises in the country, of which about 1.7 crore are manufacturing units and the rest are engaged in services or retail or trading businesses.
“That data has just been released, but is of 2013 vintage,” said K.K. Jalan, secretary in the Ministry of Micro, Small and Medium Enterprises (MSME). “It doesn’t create that kind of impact on policy-making in late 2016. So, to overcome this, we have created an MSME data-bank and the industry must furnish data on it, as it is now compulsory,” he said.
The secretary mooted the creation of new indices to keep track of MSMEs in spheres such as manufacturing, retail and trade as well as in services. “Can we generate data every month or every quarter, with an MSME index that reflects the current situation?” he asked.
Stressing that the government is concerned about the unemployment scenario and that job creation is its foremost priority, Mr. Jalan said that though small firms created a large number of jobs, the MSME ministry’s programmes don’t impact all of them. “Of the 5.8 crore such enterprises, our schemes don’t cater to more than 70 lakh,” he said. “To devise policies at a generic level for micro, small and medium enterprises is very difficult. We need a sector-specific approach to deliver better results,” he said at a FICCI conference on promoting small enterprises.
“I am working on identifying 25-30 sectors such as ceramics, toys and cycles, where a number of small enterprises exist and could be better equipped to cope with competition from imports. We have forgotten to focus on import substitution priorities and traditional small enterprises linked to agricultural and rural activities,” Mr. Jalan said. International Labour Organisation’s Country Director Pannuda Boonpala said SMEs account for two-thirds of the jobs in the world.