Madhya Pradesh offers an ideal destination to investors in terms of its central location, proximity to major markets, high agricultural production and availability of skilled workforce. MP is one of the pioneer states which have a well defined Startup Policy Scheme. We are working on redesigning the scheme to cater to the startups and incubation in a more efficient manner, says Bhaskar Lakshakar, IAS, Director, Department of MSME, Government of Madhya Pradesh and Managing Director, MP Laghu Udyog Nigam Limited, in conversation with Krishna C. Mishra of Elets News Network (ENN).
MSME could be the real growth drivers for RURBAN economy. Your comments!
The growth comes from movement and expansion of the economic activities. In RURBAN economy, the employment and investment of smaller magnitude are two key factors that are of prime importance. As we can see the employment elasticity of MSME (Ministry of Micro, Small & Medium Enterprises) sector is much more than the large industry sector and therefore it offers several ancillary activities along with employment.
This sector also has a limited requirement of physical space and other infrastructure, which could be a hindrance otherwise. In legal framework too, the sector is exempted from multitudes of legislations and regulatory provisions which again enables the sector to grow at a faster pace than the large industry sector.
In Madhya Pradesh, during the Covid-19 lockdown too we witnessed a sustaining status and lesser decline in growth in the sector which emphasizes the potential of the sector.
So, for the growth of the economy and better tax buoyancy this sector is holds huge significance.
What are the challenges for making our MSMEs globally competitive and how do you plan to overcome them?
Standardisation of the products & processes and exposure to global markets are the key components. The customer wants a solution not the product as such, so if the MSME is able to provide the solution for the requirements that can be the X-factor.
Evolving into a globally competitive entity is a multidimensional process which requires investment in terms of HR, new ideas & innovations and off course larger stream of finance for scaling up. We have also observed that the product standardization and sanctity of processes play a vital role in this excursion. Let’s take an example of food processing sector MSME that wants to step in the global market. It will be only possible when they are aware of the market trend, requirements and various international certifications. Therefore compliance to the standardization of product specifications and processes is keystone.
Making the MSME globally competitive is corollary to developing competitiveness within domestic market. The MSME should be looking the horizon beyond their domicile states and should strive for national presence first.
What are your government’s plans to empower & encourage the MSMEs in your state?
We have MSME promotion policy which offers a flat 40% reimbursement on the investments. But the subsidy model is not the only solution that the state of MP looks for promotion of the sector. We are moving towards enabler state where the ecosystem itself supports the sector to expand and penetrate.
We are going to bring new land allotment schemes that will aim to provide land each and everyone whoever wants to invest. It will be a shift to plenteousness of land from the dearth.
Encouraging the MSME is also driven by ease of business. The single window platform is under development to provide one stop solution for the sector.
State of MP is probably pioneer state in terms of making its Startup Policy and Scheme. We are working on redesigning the scheme to cater the start up and incubation in a more efficient manner.
One more thing that we are doing–bridging the gap of demand and supply of HR for industries. This we plan through effective implementation of apprenticeship act and also providing online data base services of all kind of manpower to industries.
How did the pandemic impact the MSMEs in Madhya Pradesh & what are your plans to revive them?
Pandemic affected the sector in the similar manner as it affected the entire globe, but the sign of recovery is now evident. In an exercise of identifying potential and willing investors in MP, we have enlisted more than 5,200 Cr investment, which is going to take place very soon. The recovery is fast and most of the units that were shut down temporarily during the lockdown are back to business.
We further plan to implement the Atmanirbhar MP (The vision document for MP) that focusses on inhouse capacity building of the MSME and expanding the net of industrial activities.
New scheme for the private cluster development is in pipeline that aims at converting the land dearth into land plentifulness.
Do you want to convey any message to investors?
MP, because of its geographical location, prowess in agricultural production and availability of labour, can be a destination for investments. The land in MP is available at cheap price compared to other states which ensures that the major chunk of investment is not locked in the land asset. Post covid-19 scenario is full of new avenues for business. I would say that “the growth story of MP is being written, be part of it.”