REPORT NO. 280 PARLIAMENT OF INDIA RAJYA SABHA DEPARTMENT-RELATED PARLIAMENTARY STANDING COMMITTEE ON INDUSTRY TWO HUNDRED AND EIGHTIETH REPORT Demands for Grants (2017-18) Pertaining to the Ministry of Micro, Small and Medium Enterprises (Presented to the Rajya Sabha on 16th March, 2017) (Laid on the Table of Lok Sabha on 16th March, 2017) Rajya Sabha Secretariat, New Delhi March, 2017/Phalguna, 1938 (Saka) Website : http://rajyasabha. nic. in E-mail : [email protected]. in Hindi version of this publication is also available PARLIAMENT OF INDIA RAJYA SABHA DEPARTMENT-RELATED PARLIAMENTARY STANDING COMMITTEE ON INDUSTRY TWO HUNDRED AND EIGHTIETH REPORT Demands for Grants (2017-18) Pertaining to the Ministry of Micro, Small and Medium Enterprises (Presented to the Rajya Sabha on 16th March, 2017) (Laid on the Table of Lok Sabha on 16th March, 2017) Rajya Sabha Secretariat, New Delhi March, 2017/Phalguna, 1938 (Saka) CONTENTS PAGES 1. COMPOSITION OF THE COMMITTEE............................................................................ (i)-(ii) 2. INTRODUCTION....................................................................................................... (iii) 3. ACRONYMS............................................................................................................ (iv)-(v) 4. REPORT................................................................................................................ 1-54 5. RECOMMENDATIONS/OBSERVATIONS — AT A GLANCE..................................................... 55-71 6. MINUTES............................................................................................................... 73-76 COMPOSITION OF THE COMMITTEE 1. Shri Sharad Yadav — Chairman RAJYA SABHA 2. Shri Narendra Budania 3. Shri Ram Narain Dudi 4. Shri Vivek Gupta 5. Shri Shwait Malik 6. Shri K. K. Ragesh 7. Shri Vivek K. Tankha 8. Shri Pramod Tiwari 9. Shri T. G. Venkatesh 10. Dr. Chandrapal Singh Yadav LOK SABHA 11. Shrimati Ranjanben Bhatt 12. Shri Birendra Kumar Choudhary 13. Shri S. P. Muddahanume Gowda 14. Shri Mohammad Asrarul Haque 15. Shrimati Darshana Vikram Jardosh 16. Shrimati Poonamben Hematbhai Maadam 17. Shri Bidyut Baran Mahato 18. Dr. (Prof.) Prasanna Kumar Patasani 19. Shri Tapas Paul 20. Shri Mutthamsetti Srinivasa Rao 21. Shri Ramsinh Rathwa 22. Shri Konda Vishweshwar Reddy 23. Shri Raj Kumar Saini 24. Shri G. Hari 25. Shri Rajveer Singh (Raju Bhaiya) 26. Shri Y. V. Subbareddy (i) 27. Shri Rameshwar Teli 28. Shrimati Savitri Thakur 29. Shrimati Dev Varma (Moon Moon Sen) 30. Shri Rajan Baburao Vichare 31. Shri Rabindra Kumar Jena SECRETARIAT Shri A.K. Singh, Joint Secretary Shrimati Sasilekha Nair, Director Shri Jayanta Kumar Mallick, Joint Director Shri Ranjan Chaturvedi, Deputy Director Shrimati Renu Sreekanth, Committee Officer Shri Devinder Singh Bisht, Committee Officer (ii) 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 Eightieth Report on Demands for Grants (2017-18) pertaining to Ministry of Micro, Small and Medium Enterprises. 2. The Committee heard the representatives of MSME Associations on 20th February, 2017 and Officers of the Ministry of Micro, Small and Medium Enterprises and organizations under the administrative control of Ministry of MSME on 22nd February, 2017. The Report is based on the replies provided by the Ministry to questionnaire, Annual Report, Notes on Demands, Economic Survey and other background papers of the Ministry. 3. The Committee in its meeting held on 15th March, 2017 considered and adopted the report. NEW DELHI; SHARAD YADAV 15th March, 2017 Chairman, Phalguna 24, 1938 (Saka) Department-related Parliamentary Standing Committee on Industry Rajya Sabha. (iii) ACRONYMS ARI : Agro-rural Industries ASPIRE : A Scheme for Promoting Innovation, Rural Industry and Entrepreneurship AIFs : Alternative Investment funds ASI : Annual Survey of Industries ATIs : Assistance to Training Institutions B.E. : Budget Estimate CCRI : Central Coir Research Institute CGTMSE : Credit Guarantee Fund Trust for Micro and Small Enterprises CLCSS : Credit Linked Capital Subsidy CSO : Central Statistics Office CUY : Coir Udyami Yojana DLTFCs : District Level Task Force Committees EDPs : Entrepreneurship Development Programmes GVA : Gross Value Added IIIF : India Inclusive Innovation Fund IEBR : Internal and Extra Budgetary Resources LBIs : Livelihood Business Incubators KVIC : Khadi and Village Industries Commission KRDP : Khadi Reform & Development Programme MSMEs : Micro, Small and Medium Enterprises MSEs : Micro and Small Enterprises MSMED Act : Micro, Small and Medium Enterprises Development Act MSME-DO : Micro, Small and Medium Enterprises Development Organization MGIRI : Mahatma Gandhi Institute of Rural Industrialization MSEFCs : Micro, Small Enterprises Facilitation Councils MDPs : Management Development Programmes MDAP : Marketing Development Assistance Programme MLIs : Member Lending Institutions (iv) MATU : Marketing Assistance & Technology Upgradation NSIC : National Small Industries Corporation Limited NSS : National Sample Survey NSQF : National Skills Qualification Framework NIESBUD : National Institute for Entrepreneurship and Small Business Development NI-MSME : National Institute for Micro, Small and Medium Enterprises NCSB : Non-Corporate Small Business NMCP : National Manufacturing Competitiveness Programme PMEGP : Prime Minister's Employment Generation Programme PPR : Preliminary Project Report QMSs : Quality Management Standards QTTs : Quality Technology Tools R.E. : Revised Estimate RGUMY : Rajiv Gandhi Udymi Mitra Yojna SSI : Small Scale Industries SIDBI : Small Industries Development Bank of India SDPs : Skill Development Programmes SFURTI : Scheme of Fund for Regeneration of Traditional Industries TBIs : Technology Business Incubators TCSP : Technology Centre System Programme TUF : Technology Upgradation Fund TReD : Trade Receivable Discounting Scheme UAM : Udyog Aadhar Memorandum VDP : Vendor Development Programme ZED : Zero Defect Zero Effect (v) REPORT The MSME sector has been contributing to expansion of entrepreneurial culture through business innovations. The MSMEs are widely dispersed across various sectors of the economy, producing diverse range of products and services to meet demands of local as well as global markets. As per the data available with Central Statistics Office (CSO), Ministry of Statistics & Programme Implementation, Government of India, the Ministry of MSME gave an approximation, based on the results of Annual Survey of Industries (ASI) and surveys on unorganized sector, which indicates the estimated contribution of the MSME sector to Gross Value Added (GVA), GDP and Manufacturing Output, during 2011-12 to 2015-16. The details are as under:- Share of MSME sector in GDP and total Manufacturing GVO Manufacturing Output at current price Share of MSME GVA to GVA/GDP at constant price for base year 2011-12 (%) Year MSME Share of MSME MSME MSME Total Manufacturing Manufacturing Manufacturing Services GVO GVO in total Sector Sector (Rs. in crore) Manufacturing Output (%) In GVA In GDP In GVA In GDP In GVA In GDP 2011-12 2167110 33.12 6.64 6.16 25.66 23.81 32.29 29.97 2012-13 2385031 33.22 6.77 6.27 26.05 24.13 32.82 30.40 2013-14 2651878 33.28 6.79 6.27 26.40 24.37 33.19 30.64 2014-15 2819195 33.12 6.63 6.11 26.72 24.63 33.34 30.74 2015-16 2834827 33.29 - ----- 1 Gross Value Added (GVA): It may be noted that estimates of GVA had been prepared at factor cost in the earlier series (base year 2004-05), while these are being prepared at basic prices in the new series (2011-12). GVA estimated by production approach: (GVA = Output - Material Inputs) and GVA estimated by income approach: (GVA = Compensation of Employees + Operating Surplus + CFC). 2 Gross Domestic Product (GDP): GDP is derived by adding taxes on products, net of subsidies on products, to GVA at basic prices. 3 Manufacturing GVO: Manufacturing GVO is defined to include the ex-factory value, (i.e., exclusive of taxes, duties, etc. on sale and inclusive of subsidies etc., if any) of products and by-products manufactured during the accounting year, and the net value of the semi-finished goods, work-in-process, and also the receipts for industrial and non- industrial services rendered to others, value of semi-finished goods of last year sold in the current year, sale value of goods sold in the same condition as purchased and value of electricity generated and sold. 2 2. The Committee notes that contribution of MSMEs in manufacturing sector is almost stagnant but has been steadily increasing in Service sector. 3. In view of the size of the MSME sector in the country, a Budget allocation of ` 6482 crores for Financial Year 2017-18, is just meager and needs to be utilized efficiently and judiciously. 4. It was informed that there were about 25.27 lakh MSMEs registered under Udyog Adhaar Memorandum (UAM) till 31.1.2017 of which 22 lakh were micro units. The Committee also noted the submission made by the Secretary of the Ministry that there was no realistic estimation of number and scope of MSME units in the country. The Secretary had submitted that the Ministry is in the process of developing an online census of statistical data of MSMEs. The Committee believes that without realistic and updated information regarding scope and extent of MSMEs in the country, no worthwhile policy or budgetary intervention can be made. 5. However, the Committee