Suresh Prabhu: New industrial policy coming soon, to boost MSMEs

Suresh Prabhu

India's new industrial policy, to be announced soon, is designed to create an ecosystem to help the development of micro, small and medium enterprises (MSMEs) and link them to the global market, Commerce Minister Suresh Prabhu said on Monday.

At the inauguration of the International SME convention here, he said the new document that will replace the industrial policy of 1991 has been prepared keeping in mind the need to promote the gobal supply chain of large enterprises, "which have an organic relationship with small enterprises". "We have finalised the new industrial policy and will be announcing it soon. It is going through an inter-ministerial consultation," he said.

"SMEs are the lifeline of economic activity in the whole world," the Commerce Minister said, adding there was growing concern worldwide about the widening income inequality among various strata of society, which phenomenon could only be reversed by promoting small industry and creating jobs.

Last year, the Department of Industrial Policy and Promotion brought out a draft industrial policy which aims to create jobs, promote foreign technology transfer and attract foreign investment of $100 billion annually. "There is a complementary relationship between large and small enterprises. The word ecosystem comes from nature itself where the existence of small trees and large undergrowth only allows the big trees to flourish," Prabhu said.

"Big enterprises and MNCs require global value and supply chain, which is not possible without MSMEs. Need of the hour is strengthening these linkages between big and small, and together both will propel the global economy," he added. In his address, Minister of State for External Affairs M.J. Akbar cited the government's Mudra scheme for funding the self-employed, particularly from the weaker sections.

He said more than of Rs 4,30,000 crore had been transferred by way of funding under the Mudra scheme to the "poorest of the poor, without collateral". "This has been transferred to 12 crore people and they are now creating jobs and products," he said. "NPAs (non performing assets, or bad loans) of Mudra from 120 million people are less than 7 per cent. 78 per cent of these loans have gone to women, and the reason why NPAs are so low," he added.

Noting that there are around 65-70 million MSMEs in the country, MSME Minister Giriraj Singh said the government has promoted ease of doing business for the sector and now a unit could be registered within a few minutes.

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