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Cover-240 Report-Industry-New REPORT NO. 240 PARLIAMENT OF INDIA RAJYA SABHA DEPARTMENT-RELATED PARLIAMENTARY STANDING COMMITTEE ON INDUSTRY TWO HUNDRED AND FORTIETH REPORT Action Taken Note on the 235th Report of the Committee on the Demands for Grants (2012-13) Pertaining to the Ministry of Micro, Small and Medium Enterprises (Presented to the Rajya Sabha on 21st March, 2013) (Laid on the Table of the Lok Sabha on 21st March, 2013) Rajya Sabha Secretariat, New Delhi March, 2013/Phalguna, 1934 (Saka) Website:http://rajyasabha.nic.in E-mail:[email protected] Hindi version of this publication is also available PARLIAMENT OF INDIA RAJYA SABHA DEPARTMENT-RELATED PARLIAMENTARY STANDING COMMITTEE ON INDUSTRY TWO HUNDRED AND FORTIETH REPORT Action Taken Note on the 235th Report of the Committee on the Demands for Grants (2012-13) Pertaining to the Ministry of Micro, Small and Medium Enterprises (Presented to the Rajya Sabha on 21st March, 2013) (Laid on the Table of the Lok Sabha on 21st March, 2013) Rajya Sabha Secretariat, New Delhi March, 2013/Phalguna, 1934 (Saka) CONTENTS PAGES 1. COMPOSITION OF THE COMMITTEE ........................................................................................ (i)-(ii) 2. INTRODUCTION ........................................................................................................................ (iii) 3. REPORT ................................................................................................................................... 1—19 (i) Chapter–I Recommendations/Observations, which have been accepted by the Ministry ............................................................................................................... 2 (ii) Chapter–II Recommendations/Observations, which the Committee does not desire to pursue in view of the Government’s replies.......................................... 3—5 (iii) Chapter–III Recommendations/Observations in respect of which the Committee has either not accepted the replies of the Ministry or has asked the Ministry to review its replies ......................................................................... 6—7 (iv) Chapter–IV Recommendations/Observations in respect of which final replies of the Ministry have not been received .................................................................... 8—19 4. MINUTES ................................................................................................................................. 21—24 COMPOSITION OF THE COMMITTEE (Constituted w.e.f. 31st August, 2012) RAJYA SABHA 1. Shri Tiruchi Siva — Chairman 2. Shri Narendra Budania 3. Shri Ashk Ali Tak 4. Shri Ananda Bhaskar Rapolu 5. Shri Natuji Halaji Thakor 6. Shri Basawaraj Patil 7. Prof. S. P. Singh Baghel 8. Shri Vivek Gupta 9. Shri Nandamuri Harikrishna 10. Shri M. P. Achuthan LOK SABHA 11. Dr. Rattan Singh Ajnala 12. Shri Khiladi Lal Bairwa 13. Shri N.S.V. Chitthan 14. Shrimati Poonamben Veljibhai Jat 15. Shri Ram Singh Kaswan 16. Shri Hassan Khan 17. Shri Kaushalendra Kumar 18. Shrimati Ingrid Mcleod 19. Shri Bharat Ram Meghwal 20. Shri Somen Mitra 21. Shri P. R. Natarajan 22. Shri Gorakhnath Pandey 23. Shri Jayaram Pangi 24. Shri R. K. Singh Patel 25. Shri B. Y. Raghavendra 26. Shri Gopal Singh Shekhawat 27. Shri Ijyaraj Singh 28. Ch. Lal Singh 29. Dr. Kirit Premjibhai Solanki 30. Shri E. G. Sugavanam 31. Shri Ramsinh Rathwa (i) (ii) SECRETARIAT Shri S. N. Sahu, Joint Secretary Shrimati Sunita Sekaran, Director Shri Roshan Lal, Deputy Director Shri Ranjan Chaturvedi, Assistant Director INTRODUCTION I, the Chairman of the Department-related Parliamentary Standing Committee on Industry, having been authorized by the Committee, hereby present this Two Hundred and Fortieth Report on Action Taken Notes furnished by the Ministry of Micro, Small and Medium Enterprises on the recommendations contained in the Committee’s Two Hundred and Thirty-Fifth Report on the Demands for Grants (2012-13). 2. I thank the Ministry of Micro, Small and Medium Enterprises for furnishing the Action Taken Notes on the recommendations contained in the Committee’s Two Hundred and Thirty-Fifth Report. 3. The Committee in its meeting held on the 19th March, 2013 considered and adopted the report. TIRUCHI SIVA NEW DELHI; Chairman, 19th March, 2013 Department-related Parliamentary Standing Committee on Industry. (iii) 1 REPORT The Action Taken Report of the Committee deals with the Action Taken by the Ministry of Micro, Small and Medium Enterprises on the recommendations contained in the Committee’s Two Hundred and Thirty-Fifth Report on the Demands for Grants (2012-13) pertaining to Ministry of Micro, Small and Medium Enterprises. 2. Action Taken Notes have been received from the Ministry of Micro, Small and Medium Enterprises in respect of the recommendations contained in the Report. These have been categorized as follows: Chapter-I – The recommendations/observations, which have been accepted by the Ministry. The Committee is pleased to observe that the Ministry has accepted its recommendations as mentioned in the Chapter–I of the Report. Chapter-II – The recommendations/observations, which the Committee does not desire to pursue in view of the Government’s replies. In respect of these recommendations the Committee is convinced with the logic and explanations advanced by the Ministry and therefore do not want to pursue them for the present. Chapter-III – The recommendations/observations in respect of which the Committee has either not accepted replies of the Ministry or has asked the Ministry to review its reply. The Committee expresses its concern over the non-implementation of recommendations contained in Chapter–III and desires that the Ministry should furnish logical explanations therefore. Chapter-IV – The recommendations/observations in respect of which final replies of the Ministry have not been received. In respect of recommendations placed in Chapter–IV, the Ministry has either furnished the interim replies or couched its language in vague terms like noted for compliance/guidance, therefore, the Committee desires that the Ministry should furnish Action Taken Notes in respects of recommendations categorized in Chapter-IV in detail and to the point, as per the intention and spirit of the recommendations of the Committee. 3. The details of the ATR are being discussed in the succeeding pages. 2 CHAPTER-I Recommendations/Observations, which have been accepted by the Ministry Recommendation/Observation 1. The Committee therefore recommends the Government to consider enhancing the allocation for providing assistance for setting up of marketing complexes, exclusively for KVIC products not only in metro cities but also in state capitals. (Para No. 40) Action Taken/Comments An umbrella scheme for marketing and publicity named ‘Market Promotion (including export promotion) & Publicity’ has been proposed in the Twelfth Five Year Plan, in which a new component for developing ‘Marketing Complexes/Plazas’ has also been proposed. 2 3 CHAPTER-II Recommendations/Observations, which the Committee does not desire to pursue in view of the Government's replies Recommendation/Observation 1. The Committee strongly recommends that policies must be adopted whereby the MSMEs showing good performance would get enhanced credit automatically. (Para No. 27) Action Taken/Comments The recommendation of the Committee was taken up with the RBI, Indian Banks’ Association (IBA) & Small Industries Development Bank of India (SIDBI). The RBI has informed that Bank Boards have been given freedom to frame their own policies based on their commercial judgment. Further, IBA has informed that hassle free credit enhancement can be made available to MSME units showing good performance consistently. However, it would not be possible for banks to sanction higher limits without going through a review/renewal process. The limits are fixed based on the projected turnover. As per SIDBI’s Loan Policy, no deserving and bankable proposal is denied assistance. Accordingly, SIDBI provides enhanced credit to viable projects/good performing MSMEs. Recommendation/Observation 2. The Committee appreciated this suggestion which would promote the synergy between the large and small industries and feels that such synergy would actually promote research and development capabilities of the MSMEs and encourage innovation. The Committee strongly recommends for measures for establishing synergy between the large industries and MSME sector. (Para No. 28) Action Taken/Comments It pertains to the proposal/idea of association for providing tax benefits of certain percentage to the large industries if they buy minimum percentage of goods and services from MSMEs sector. The proposal needs to be examined by Ministry of Finance. This Ministry proposes to send this as part of budget proposals annually sent to Ministry of Finance. Regarding other measure for establishing synergy, the procurement policy has been formulated whereby Government and Public Sector body are required to procure 20% of their procurement requirement from the SME sector. Recommendation/Observation 3. The Committee is of the opinion that the MSME Ministry has fallen short of the target (under KVI). At a time when skill development is being emphasized by the Government and the Ministry is one of the key nodal Ministries for developing the skill of the youth, it is sad to note 3 4 that it has not been able to meet the target. The Committee strongly recommends for measures to achieve the target in this respect. (Para No. 36) Action Taken/Comments Against the target of 90,000
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