MSME Sector Profile MSME Classifications

MSME Sector Profile MSME classifications

2 India Scenario Overview

• 6.33 crore MSMEs across various industries, employing over 11 crore people in 2017-18 • Over 6000 products ranging from traditional to high-tech items are being manufactured by the MSME Sector in addition to provide wide range of services

National Contribution by MSMEs Leading Industries: MSME Sector

Retail Trade, Except of Motor Vehicles and Motorcycles; Repair of Personal and Household Goods Manufacturing of Wearing Appearel; Dressing ` and Dying 45% of India’s 34.48% 28% of India’s Manufacturing 39.85% Manufacture of Food Products and Beverages GDP Output Other Service Activities

Other Business Activities 3.77%

21% of Employment, 6.20% Others 40% of India’s 2nd highest after 6.94% 8.75% Exports agiculture

4 Source: Annual Report 2017-18, Ministry of Micro, Small and Medium Enterprises, Government of India Factors for MSMEs success

Digital India Make in India ■ Robust IT infrastructure Skill India ■ Conducive policies and ■ Transparent and ■ An initiative to train favorable incentives for integrated government over 40 crore people in foreign investors services India in different skills by 2022

Exports MSME Strong Local Demand ■ Presence of SME Export Strengths ■ Growing population Promotion Council ■ Increasing number of ■ Global Demand for large industries Value Added Products

Conducive Policies Robust Infrastructure

■ Credit support ■ Sector Specific Clusters ■ Quality assurance ■ Special Economic Zones ■ Encouraging ■ Industrial Corridors entrepreneurship

5 Government of India Initiatives (1/3)

Credit Support • Credit Guarantee Fund for Micro and Small Enterprises  Guarantee cover of 75% of the credit facility up to INR 50 lakh and 50% of the credit exposure above INR 50 lakh and below INR 1 crore • Micro Finance Programme 7.5% of the loan amount is provided by central government through SIDBI • Providing financial assistance on International Cooperation Up to 95% of airfare and space rent for entrepreneurs for participation in international events and to MSME business delegations • Financial assistance to set up new enterprises under PMEGP  Subsidy is provided at 15% and 25% for Urban and Rural Areas respectively for beneficiary belonging to general category and 25% and 35% for Urban and Rural Areas respectively for beneficiary belonging to Special Category* • Funding support for implementing ‘Lean Manufacturing’ projects 80% of the cost of lean manufacturing consultant

Sources: http://msme.gov.in/web/portal/Scheme.aspx . Special Category consist of SC / ST / OBC / Minorities / Women, Ex-servicemen, Physically handicapped, NER, Hill and Border areas 6 Government of India Initiatives (2/3)

Assistance for Quality Control and Standardization • Financial assistance under Performance and Credit Rating Scheme  75% of the fee is reimbursed for carrying out rating through empanelled rating agencies • Funding support for conducting ‘QMS (Quality Management Standards) Awareness’ workshops • Reimbursement of registration fee for Bar coding

Promoting Entrepreneurship • Support for setting up of ‘Business Incubators’ • Scheme for 'Entrepreneurship Skill Development Programmes (ESDP)' • Scheme for 'Supporting 5 selected universities / colleges to run 1200 entrepreneurship clubs per annum' • Scheme for 'Trade Related Entrepreneurship Assistance and Development (TREAD) Scheme to Women'

Sources: http://msme.gov.in/web/portal/Scheme.aspx 7 Government of India Initiatives (3/3)

Skill Development • Assistance to Training Institutions Scheme • Funding support for setting up ‘Mini Tool Rooms’ and Training Centers under PPP mode • Scheme for 'Strengthening of Training Infrastructure of existing and new Entrepreneurship Development Institutions'

Technical Support • Scheme for 'Marketing Assistance and Technology Up-gradation of MSMEs'- an NMCP (National Manufacturing Competitiveness Programme) Scheme • Scheme for 'Technology and Quality Upgradation (TEQUP) Support to MSMEs'- an NMCP Scheme • Scheme for 'Promotion of ICT in Indian Manufacturing Sector (ICT)'- an NMCP Scheme

Marketing and Design Assistance • Marketing Assistance Scheme • Funding support for implementing ‘Design’ projects • Funding support for conducting assessment of IPR related needs of MSMEs

Others • Scheme for 'Micro & Small Enterprises Cluster Development Programme (MSE-CDP) • National Awards under various category

Sources: http://msme.gov.in/web/portal/Scheme.aspx 8 Gujarat Scenario A manufacturing powerhouse

Gujarat is a leader in Chemicals, Petrochemicals, Dairy, Drugs and Pharmaceuticals, Cement and Ceramics, Gems and Jewellery, Textiles and Engineering

Gujarat’s contribution to India in key products (% output)

91% 35.5% 78%

Share in 65% 62% Gujarat’s GSDP 53%

in 2016-17 32% 26% 19%

Number of Industrial st Entrepreneur Memorandums 1 (IEMs) filed and implemented in India in the last 10 years

10 Source: Gujarat Socio – Economic Review 2017-18; DIPP; ASI 2015-16 Leading FDI destination

• Gujarat was amongst the top three FDI attracting Top 5 sectors attracting maximum FDI inflows states in India in 2016-17 (Jan 2000 to Mar 2017)

• Gujarat received FDI inflows worth INR 113,347 Automobiles 15% Crore (USD 17.44 billion) between Apr 2000 and Dec 2017, accounting for 5% of the total FDI inflow into India Telecommunications 11%

FDI grew at a CAGR of ~58% between Cement & Gypsum Products 10% 2013-14 and 2016-17

Power 10%

Chemicals (other than Fertilizers) 6%

Others 48%

Source: DIPP 11 Gujarat ranks among the top three in the country across various industrial indicators

Percentage share in India's total Percentage share in India's total output net value addition 17.01 16.82 19.97 16.82% 16.86% 16.86 of India’s total 10.19 of India’s total 10.2 6.02 5.13 industrial 6.38 6.24 net value output addition

Maharashtra Gujarat Tamil Nadu Karnataka Uttar Pradesh

Percentage share in India's total Percentage share in total persons factories engaged in India 16.01 16.24 10.92% 13.79 10.48% 12.1 10.92 10.48 of total 7.06 of India’s total 6.57 7.01 6.56 persons factories engaged in India

Tamil Nadu Maharashtra Gujarat Andhra Uttar Pradesh Pradesh

12 Source: Annual Survey of Industries Gujarat ranks among top three states in industrial output in leading MSME manufacturing sectors

Pharmaceuticals Textiles Machinery and Equipment

Chemicals Food Products Rubber and Plastic Products

Source: Annual Survey of Industries Statistics 2015-16 13 Gujarat rated as Top Performing State in 2017, as per NCAER State Investment Potential Index • Gujarat secured 1st rank among 21 peer states on key factors critically linked to investments, industrial and economic activity in any state

• Overall, Gujarat secured top position on six parameters assessed: • Land • Labour • Infrastructure • Economic climate • Political stability & Governance • Business perceptions

14 Source: National Council for Applied Economic Research (NCAER) MSME clusters in Gujarat

106 activity clusters have been identified across the state

Number of Category Clusters

Engineering 21

Chemicals 23

Textiles 18

Plastic Products Mineral based 16 Paper Products industry Chemical Industry Engineering Agro &Food 07 Processing Textile Industry Food Products Others 21 Mineral Products Others

15 Sector wise distribution of MSMEs in Gujarat

Industry wise Break up of MSMEs Total MSMEs (up to 2nd Oct 2015) Industry Registered from 2006-2015 Others Textiles 105463 5% Trading Machinery and parts except electrical 30159 Activities 19% Mining and Quarrying 6578 Food Products 9106 Chemical & chemical Products 12131 Wood Products 4623 Rubber & Plastic Products 8784 Non-metallic mineral Products 6362 Basic Metal Industries 25872 Paper Products & Printing 6837 Electrical Machinery and Apparatus 7780 Transport equipment and parts 3114 Leather Products 6762 Service Beverages, Tobacco & Tobacco Products 1625 Activities Service Activities 47816 Manufacturing Trading Activities 72920 63% Others 20416 Total 376348

16 Sources: Industries Commissionerate , Government of Gujarat Growth of MSMEs in Gujarat

Cumulative Growth of MSMEs in Gujarat • Total number of MSME(s) registered in 8000000 350000 Gujarat from 2006 to Sept. 2015: 7000000 300000 3,21,181 6000000 250000 5000000 200000 • Since, 20-Oct-2015 new MSMEs are 4000000 150000 registered under Udhyog Aadhar 3000000 2000000 100000 Memorandum (UAM) instead of EM-II. 1000000 50000 • Total 2,93,358 MSMEs have been 0 0 2010- 2011- 2012- 2013- 2014- 2015- registered under UAMs in Gujarat till 2011 2012 2013 2014 2015 2016 No.of Units 27940 79721 147955 206581 270740 321181 date Investment ( Rs. In Lacs) 890264 2051714 3343874 4617159 5976188 7231582 Micro – 2,39,037 ; Small – 52,404; Medium Employment 264867 627738 1008825 1392067 1802500 2064244 – 1,917

86% Rise in registrations in MSME units between Aug 2016 and Dec 2017

3.3 Million + MSME units in Gujarat according to NSS 73rd Round (2015-16)

Note : The data for 2015-16 is up to 20-Oct-2015. 17 Sources: Industries Commissionerate , Government of Gujarat, NSS 73rd Round Support for MSMEs strengthened in Gujarat 2018-19 budget

Rs. 50 Crore Rs. 450 Crore allotted as Start-Up for cottage and fund for MSMEs rural industries

Rs. 16.5 Crore Rs. 35 Crore for marketing of for promotion of goods produced Khadi by artisans

Rs. 843 Crore allocated towards development of MSMEs

18 Source: Gujarat Finance Department Government provides holistic support to MSMEs Financial Assistance Development of MSME • 50% decrease in price of Parks / sheds plots up to 3,000 sq m offered to • 4 dedicated MSME parks in MSME units as of May 2018 Sanand, Juned, Halol and Bardoli with plot size in the range from • Industrial infrastructure 250 – 500 sq.mtr. Development work of Rs • Dedicated Women industrial park 975 crore to be undertaken in GIDC Sanand spread across 18.3 under Gujarat Investment ha Promotion Program Assistance to MSMEs Skill Development MSME under various policies • Skill development assistance Commissionerate MSME facilitation desks provided to MSMEs • Capital Investment Subsidy • To create an enabling • MSMEs facilitation / help desks in • Interest Subsidy • More than 50 Skill Up-gradation ecosystem for MSMEs 11 cities – Ahmedabad, Vadodara, • Assistance for Venture Capital Centers (SUCs) have been Surat, Gandhinagar, Rajkot, developed for imparting training in • To facilitate and provide Bhavnagar, Valsad, Bharuch, Anand, • Technology Acquisition Assistance hand holding support for Mehsana and Bhuj • Assistance for Environment various GIDC estates the development & growth Protection Measures of MSMEs in Gujarat • To provide guidance & information on various schemes of the state and • Special incentives for women central government entrepreneurs

Sources: Industries Commissionerate, Government of Gujarat 19 A robust policy infrastructure to support MSMEs

Garment & Apparel Agri-Business Aerospace and Electronics General Incentives Policy 2017 Policy 2016 Defense Policy 2016 Policy 2016 Scheme 2016

Wind Power Biotechnology Industrial Policy Health Policy 2016 IT Policy 2016 Policy 2016 Policy 2016 2015/2016

Solar Power Startup Tourism Manufacturing Textile Policy Policy 2015 Scheme 2015 Policy 2015 Policy 2013 2012/2013

20 Incentives to MSMEs under Gujarat Industrial Policy 2015 (1/2)

Sr no. Scheme Incentive 1 Assistance on Capital Investment 10% (upto 15 lakhs) -15% (upto 25 lakhs) on term loan Subsidy amount disbursed by bank/ financial institution 2 Assistance for Interest Subsidy 5-7% Interest Subsidy

3 Assistance for Venture Capital 20% of Project Cost provided as promoter funding

4 Assistance for Quality Certification 50% of fees/ costs incurred for obtaining various quality control approvals 5 Assistance for Technology Acquisition Up to 50% of the cost of acquisition of new technology

6 Assistance for Patent Registration Up to 75% of total cost/expenditure incurred on obtaining the patent 7 Assistance for Saving in Consumption Up to 75% cost of energy/water audit recognized of Energy & Water institution/consultant

21 Incentives to MSMEs under Gujarat Industrial Policy 2015 (2/2)

Sno. Scheme Incentive 8 Assistance to SMEs for raising Capital Up to 25% of expenditure incurred on raising funding from the through SME exchange SME exchange 9 Assistance for Reimbursement of CGTMSE Reimbursement of 100% Service Fee paid on collateral free Fees loans of INR 1 crore to banks and financial institutions by women entrepreneurs, SC/ST, physically challenged 10 Rehabilitation of Sick Enterprises 50% of expenditure incurred on preparation of diagnostic report from expert/expert agency as per the Draft Rehabilitation Scheme 11 Assistance for encouraging ‘Green • Financial assistance of up to 75% for audit fees and up to Practices & Environmental Audit’ 25% of cost of monitoring systems • Financial assistance of 35-50% of cost of Environment Management System and Occupational Safety equipment

12 Market Development Assistance Financial assistance for rent payment for participation at State/ National/ International level exhibitions

22 Skillset development

• Intake capacity of 71,799 engineering students

• Over 7 lakh graduates added to the state talent pool every year

• More than 8 lakh candidates have been imparted computer & IT training through eMPOWER

• Annual capacity to train more than one million candidates

• 800 Industrial Training institutes (ITIs)

• Centres of Excellence (CoE) funded by World Bank under Vocational Training Improvement Project (VTIP) scheme

23 Organizations for promotions of MSMEs

Industries ■ Promotes industrial development by bringing about industrial reforms Commissionerate (IC) ■ Monitors and Controls functions for planned industrial development

■ iNDEXTb was set up as a ‘facilitating’ organization to ensure smooth and hassle-free experience Industrial for a prospective investor Extension Bureau ■ iNDEXTb provides information to the public in general and entrepreneurs in particular, (iNDEXTb) regarding the opportunities available in the State of Gujarat for industry, commerce, trade, business openings and participation therein

■ GIDC has been created for securing the orderly establishment and organization of industries in Gujarat Industrial industrial areas and industrial estates in the state Development ■ To fulfill the above mandate, the Corporation has established 202 industrial estates, ranging Corporation from mini to mega sizes. It has also developed 5 Special Economic Zones (GIDC) ■ GIDC is now establishing 11 Special Investment Regions in tune with the changing economic and industrial scenario

Source: http://ic.gujarat.gov.in/, http://www.indextb.com/, http://www.gidc.gov.in/ 24 Institutes for Assistance to MSMEs

Micro, Medium . MSME-DI (formerly Small Industries Service Institute), Ahmedabad covers the entire State of Gujarat and Small covering 33 districts and Union Territories of Dadra & Nagar Haveli, Daman and Diu. Industries . The Institute with its 2 Branch, Small Industries Service Institutes, one each at Rajkot and Silvassa and one Development Field Testing Station, Ahmedabad, serves the small scale industries in these areas Institute http://www.msmediahmedabad.gov.in/

Entrepreneurship ■ The program, 'SME Banking & Financial Services' has been designed to facilitate an in-depth understanding Development Institute and develop skills in assessing financial needs of SMEs and designing appropriate financial intermediation of India http://www.ediindia.org/

■ To develop entrepreneurs in state at urban and rural areas so that they can start their manufacturing or service venture for the economic growth and become self employed as well as provide employment to Center for others. Entrepreneurship Development (CED) ■ The Entrepreneurship Development Program (EDP) develops confidence in a person to establish his own venture and manage it successfully http://www.ced.gujarat.gov.in/

Sources: http://www.msmediahmedabad.gov.in/, www.ediindia.org/, http://www.ced.gujarat.gov.in/ 25 Ease of Doing Business

Ease of Doing Business in Gujarat Features of Investor Gujarat Single Window Facilitation Portal (IFP) Clearance Act 2017 • Create/ add multiple projects using single login id • Pre-defined timelines • Common Application Form for 90 business related • SMS/ Email alerts applications • Digi-Locker to upload documents • Robust monitoring mechanism at District • Online Tracking of application and State level • Integrated payment gateway • Digitally Signed Certificates One Stop Information Grievance Redressal on IFP • Process Flows, Checklists Mechanism and Timeline for 90 • Track/ Raise online Applications grievance www.ifp.gujarat.gov.in • GIS based Land Banks • Time bound service delivery in 7 days • Sector specific Policies • Sector Profiles • Dedicated Toll free number • Bureau of Indian Standards • Dedicated grievance redressal officers • Verify third party Certificates 26 Source: Gujarat Investor Facilitation Portal Gujarat: Best in India for doing business 1st 2nd 3rd Complying with • Allotment of land environmental • Complying with Enforcing Contracts procedures labor regulations • Carrying out inspections

Consistently ranked amongst top 3 Indian states in Ease of Doing Business rankings

Govt. of Gujarat launched the ‘Gujarat Single Window Clearance Act, 2017’, to ensure that all necessary clearances are provided to investors in a time-bound manner

'Investor Facilitation Portal‘ - a single window online platform which acts as the first point of contact for any prospective investor looking to invest in Gujarat 1

27 Source: DIPP statistics and World bank Statistics Ranking Setting up business in Gujarat

Step 4: Pre-operation Approvals

Step 3: 1. Boiler registration, Boiler License 2. Boiler Erector Certificate Pre Establishment Approvals 3. Boiler Manufacturer Certificate 1. Consent to Establish under Air & 4. Consent to Operate under Air & Water Act by GPCB Water Act by GPCB 2. Building Plan approval by ULB / Step 2: 5. Building Use permission by ULB / GIDC GIDC Land Related approvals 3. Approval of electrical plan by Chief 6. Certification of Electrical 1. Land Allotment – GIDC Electrical Inspector (for HT connections) Installation by Chief Electrical Step 1: Inspector 2. Property Registration (in Case of 4. Approval of Factory Plan by Company Registration Non GIDC) Directorate of Industrial Safety and 7. Factory License by Directorate of Health (DISH) Industrial Safety and Health (DISH) 3. Change of Land Use 1. Udyog Aadhar / IEM 5. Registration under Building and 8. License for contractors under Other Construction workers Act 2. Company Registration / 4. Tree cutting and Tree Transit provision of The Contracts Labour Partnership firm permission 6. Electricity Application Act 3. Apply for PAN 7. Water Connection Application 9. Registration of principal employer's ~ 45 – 60 days each for Step 2, 3 & 4 establishment under provision of Step 1 takes < 1 Week The Contracts Labour Act All applications can be made at Single Window Portal www.ifp.gujarat.gov.in 28 Future outlook and investment opportunities Considering the expected growth trends in the top industry sectors and areas, MSMEs can look to expand their share in some of the industries mentioned below, in times to come

Electronics IT/ITes Automotive Healthcare • ESDM including Textiles • Cloud Computing • Automotive electronics • Low cost medical semiconductor design, • Raw fabric and • automotive components devices electronic components • Social media and dye production mobility • Defence automotive • Medical design and hi-tech • Processing & consumables manufacturing • Data analytics • Rubber and chemicals Packaging Diagnostic labs • Electronic components services supply to the tyre

Pharmaceuticals Engineering and Process Agro and Food Chemicals Defense Offset: • Generics and API Equipment Processing • High • New age manufacturing • Engineering solutions • Processed and performance information • Contract research segments like chemicals packaged food chemicals systems, and petrochemicals, communication • Nutraceuticals and • Dairy products • Opportunities pharma and automotive PCPIR platforms, nutracosmetics • Cold chain simulators and • Next generation storage • Petrochemicals automation tools equipment • Textile chemicals • Green Engineering

29 Thank you