Innovative SMEs to drive Indian economy: CII

March 19, 2008 - India

Transforming micro, small and medium enterprises (MSMEs) into world class entities was the theme of the fifth India Global Summit on MSMEs 2008, held in New Delhi from 18-19 March 2008.

The Summit was organized by the Confederation of Indian Industry (CII), the Ministry of Micro, Small and Medium Enterprises, Government of India, in association with SIDBI.

Inaugurating the Summit, Mr. Vayalar Ravi, Minister of Overseas Indian Affairs, Government of India, called the growth of this sector a ‘movement’.

He mentioned that the Government of India has supported this sector since the 1950s, and with the enactment of Micro, Small and Medium Enterprises Development Act (MSMED Act) 2006, the Government of India continues to give full support to the MSME’s.

The Minister also released the CII SME Annual Report and the Publication “Opportunity India: Advantage Indian SMEs”, a study of Joint Ventures and Technology Collaboration between Indian SMEs and Foreign companies.

Providing the Nigerian perspective, Madame Modupe A. Adelaja, Director General, Small and Medium Enterprises Development Agency of Nigeria said that Nigerians have always been entrepreneurial in nature, and the Nigerian government while recognizing that this energy needed to be tapped to reduce poverty among its 140 million strong population, focused on wealth creation through MSMEs as one critical point of its 7-point development agenda. India and Nigeria, she said, have a common historical background, and Nigeria can learn from the Indian experience.

Mr. Jawahar Sircar, Additional Secretary and Development Commissioner (MSME), Ministry of Micro, Small and Medium Enterprises (MSMEs), emphasized the importance of this sector, with a total size of US$140 billion, as the driving force for the long term growth of the Indian economy.

The MSMEs are a vital part of the Indian economy contributing over 45% of the country’s industrial production and around 40% of the total exports. Thirteen million MSMEs in India employ over 31 million people.

The government has identified three thrust areas for increasing competitiveness in this area: technology (including quality), skills development and finance.

Of the three, technology and quality were crucial, and he spoke of how companies – more than 15,000 have been assisted in obtaining ISO certification.

He also spoke of the National Manufacturing Competitiveness Programme, which has ten components in various stages of approval. Six of these, he said, concentrate on quality.

Quality and Innovation was also emphasized by Dr Surinder Kapur, Chairman, Manufacturing Innovation Mission, CII and Chairman and Managing Director, Sona Koyo Steering Systems Ltd.

He spoke of CII’s efforts to introduce quality and innovation in Indian MSMEs through ‘clustering’ of companies to learn about these areas.

“In the long term it will be innovative SMEs which will drive transformation. CII has 131 clusters impacting more than a thousand SME’s,” he said

In his concluding remarks, Mr. Ramesh Datla, Chairman, CII SME Forum and Managing Director, ELICO Ltd, said, that while the MSMEs have been globally recognized as a priority growth sector for growth and development, there is still a lack of clear developmental agenda and program of action for MSMEs for various reasons.

Any future agenda, he said, needs to encourage the development of SMEs in an environment of increased economic interdependence and open regionalism.