New Delhi: The Micro, Small, and Medium Enterprises (MSME) sector plays a crucial role in fostering economic growth globally. These enterprises contribute significantly to employment generation, innovation, and overall economic development. However, challenges within the sector, such as skill gaps among the workforce, can impede its full potential.

Addressing these gaps is essential to enhance productivity and competitiveness. Initiatives that focus on promoting skill development among MSME employees not only empower the workforce but also contribute to the sustainable growth of the sector, ultimately benefiting the broader economy. In this regard, Shivani Babbar, ObserveNow interacted with P Narhari, IAS Secretary & Commissioner MSME Department Government of Madhya Pradesh.

How is the MSME sector contributing to the economic growth of Madhya Pradesh? What initiatives has the MSME Department undertaken to promote the development of micro, small, and medium enterprises in the state?

The MSME sector has been a critical component of MP’s growth story. The segment is expected to contribute to 30% of MP’s GSDP in the FY 2023-24. The MSME department has taken many proactive steps including – the MP MSME Development Policy 2021 and the Policy for Development of State’s land. In the MSME sector, the MSME state policy provides:

·The industrial subsidy to the new industrial units is 40% of investment by the new industrial unit investing up to 10 Crore in plant and machinery. 

·Apart from this, the government also provides an Additional Industrial Development Subsidy of 2% per year (for four years) for unit set up by women/SC/ST entrepreneur(s) or 2.5% per year (for four years) for unit set up by women entrepreneur(s) of SC/ST category. 

·The government provides subsidies for capital investment of 10 Crore to 50 Crore by MSMEs. The policy also has special provisions for sectors like – furniture, pharma, toys, apparel, and textiles which are critical for the growth of the state. 

Can you highlight some of the recent policy initiatives introduced by the MSME Department to support and enhance the competitiveness of MSMEs in Madhya Pradesh? How does the government plan to address challenges faced by MSMEs, especially in the current economic scenario?

The MSME department has always taken prudent steps to boost the competitiveness of the state’s MSME. The MSME state policy 2021 has specific provisions catering to enhance the quality and thus, competitiveness of the sector. 

·The State Government will reimburse 100% of the expenditure incurred for certification for ISO/BIS/BEE certificate by a unit investing up to Rs. 25 lakhs in plant and machinery, subject to a maximum of Rs. 5 lakhs.

·Assistance up to 50% of the cost incurred on obtaining these certifications subject to a maximum limit of Rs. 25 Lakhs will be provided for obtaining quality certification exclusively for export, during the policy period, which made MSMEs of the manufacturing sector of the state, eligible to export in USA/European Union/Other OECD countries. 

·The MSME State Policy 2021 also provides 50% of the balance amount (10%, 20%, and 25% of the total cost to micro, small and medium industries respectively) for ZED certifications which leads to the circular economy and thus, cost reduction increasing the competitiveness. 

In the era of rapid technological advancements, how is the MSME Department facilitating the adoption of technology by MSMEs in the state? Are there specific programs or incentives to encourage MSMEs to embrace digitalization and innovation?

The MSME department has proactively integrated digitization into its processes to make it seamless and more accurate. Some of the steps undertaken by the MSME department in this direction are- 

·Integration of the MP Startup portal with the GOI’s DPIIT. MP MSME portal for schemes like ZED.

·In the Micro and Small Enterprises Facilitation Council- Appeals are facilitated through online proceedings by accepting virtual presence. 

·The financial assistance applications are also processed online after being received from the district and the amount is credited to the beneficiary’s account through Direct Benefit Transfer.

What steps has the MSME Department taken to address skill gaps and promote skill development among the workforce in the MSME sector? Are there collaborations with educational institutions or industry partners to enhance the skill set of MSME entrepreneurs and employees?

The Government of Madhya Pradesh has taken progressive steps to ensure quality in the delivery of technical and vocational education through both government and private players.

·CEDMAP: In this regard, the Department of Micro, Small and Medium Enterprises (DoMSME) in collaboration with CEDMAP (Centre for Entrepreneurship Development Madhya Pradesh) a premiere institution for undertaking various entrepreneurship, skill as well as livelihood development activities has developed learning programs under the broad objective of creating self-employment opportunities in the state.

·Under MSMED Policy, 2021, skill development and training expenses reimbursement assistance of Rs. 13000 per new employee shall be provided for 5 years for Apparel Sector. 

·MP Startup Policy and Implementation scheme 2022- The assistance of reimbursement of expenditure for skill development and training will be given to a maximum of 25 employees per new employee Rs 13000 per year for three years.

·The Department also conducts workshops with the help of different institutions to provide exposure to MSMEs. 

What measures has the MSME Department implemented to improve the ease of doing business for MSMEs in Madhya Pradesh? Are there any plans to streamline regulatory processes and reduce bureaucratic hurdles for MSMEs?

All districts of Madhya Pradesh have at least One industrial area. 208 notified industrial areas set up by the Department spread over 6500+ hectares. 31 MSME clusters (including 19 on private land area); 14 New Industrial Areas are under Development; & 27 MSME Clusters are in the process of approval. Industry-friendly land rules to develop government land. Transparent land allotment procedure through an online process on a First-Come-First-Serve basis.

The Government of Madhya Pradesh has enacted ‘The Madhya Pradesh Udyogon Ki Sthapna Evam Parichalan Ka Saralikaran Adhiniyam, 2023. It aims to provide an exemption from obtaining specified approvals and inspections for establishing industrial units in notified industrial areas of Madhya Pradesh. 208 industrial areas/clusters have been notified under this Act of the Department of MSME. 

Are there any ongoing collaborations or partnerships with other states, central government agencies, or international organizations to strengthen the MSME ecosystem in Madhya Pradesh? How does the MSME Department engage with industry associations and stakeholders to gather insights and feedback for policy formulation?

Several steps have been undertaken by the Department of MSME, Government of Madhya Pradesh for the promotion and exports from MSMEs of Madhya Pradesh. This includes regular capacity-building initiatives and e-commerce onboarding drives. For the introduction of State’s MSMEs at the international level, virtual buyer-seller meets were also undertaken along with Indian embassies and missions abroad. 

·MOU Signed with Walmart-Swasti under Walmart Vriddhi initiative to help State’s MSMEs expand their domestic capabilities and participate in the global supply chain. 

·Active collaboration with premier institutions such as the Directorate General of Foreign Trade (DGFT), Agriculture and Processed Food Products Export Development Authority (APEDA), etc.

·MOU Signed with premiere organizations such as SIDBI, CII, ONDC, ASSOCHAM, HDFC Bank, YourStory, FIIT Delhi, M1xchange, PHDCCI, TiE, RXIL, Invoicemart, NSE India, and AISECT for capacity building and market access to MSMEs and provide mentorship and funding support to Startups in Madhya Pradesh.