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Transcript

Hello friends!! In our last class we discussed about how the innovations are incubated and they are commercialized and popularized among the society. Wherein there are institutional efforts which are helping the grassroot level innovators to document their ideas and to popularize their ideas. In this class we will be discussing about an institution rather we can say the ministry which is working for the innovations as well as establishment the enterprise that is the ministry of micro small medium enterprises (MSME) and its role in the entrepreneurship development. What exactly the ministry does for development of entrepreneurship and how it is sustaining the small enterprises throughout the country. So this is what we will be discussing in today’s class.

The ministry of micro small medium enterprises is one of the potential employment generators in the scenario of entrepreneurship that you can say. So the reason behind that is MSME that accounts for about 45% of India’s manufacturing output. This is not a small amount. This is what is the role of the small enterprises and the ministry supporting this particular initiative and MSME accounts for about 40% of India’s total exports which is also a considerable figure in the export scenario and it is proving employment opportunity for 114 million people and it has around 48.8 million units. The only negative aspect with this micro and small enterprises is many of these enterprises about 90% of them are not registered with any of the governmental institutions otherwise they are functional. Apart from this when it comes to the employment generation it is one of the very interesting and impressive figures are there and its export potential is also very very impressive and when its contribution to total Indian production is also very very impressive. It manufactures about 6000 products ranging from the traditional to the high tech items and that is what is the range that we can have incase of the small scale enterprises or the micro small and medium enterprises that we can say. Now having said this what is that criteria which divides an enterprise into micro medium and small enterprise. So government has fixed particular criteria for that. What is that criteria? So, there are two major classifications which are maybe it is a manufacturing enterprise or the production unit or is a service providing unit. In both the cases based on the investment so the classification has been made. To classify under micro enterprise incase of manufacturing industry if your investment is about Rs.25 lakhs it comes under micro enterprise. And at the same time if you are a service provider so if your investment is around Rs 10 lakhs you are come under micro enterprise. Then the second category is the small enterprise 25 lakhs to if your investment is around Rs. 5 crore, upto Rs 5 crore, more than 25 lakhs and upto Rs 5 crore you are classifying under the small industry in case of manufacturing processes. In case of service enterprises if investment is more than Rs. 10 lakh and upto Rs 2 crore you are qualifying under the small enterprises. Coming to the medium any investment in case of manufacturing more than Rs. 5 crore and upto Rs 10 crore classifies under medium enterprises. In case of the service enterprises any investment more than Rs 2 crore upto Rs 5 crore of investment is coming under medium enterprises in case of service sector. Why this classification? So this classification helps the government to understand how many numbers of units that are coming under this and what are the appropriate policies that we can go for the micro enterprises, the small enterprises and the medium enterprises and there are good numbers of benefits out of this classification.

So coming to the term “village industries” which is associated with the micro enterprises, as well as the medium as well as the small enterprises. So what is that village industries mean? So as it has been defined in KVIC, Khadi and Village industries Act1956 as ‘any industry located in rural area which produces any goods or renders any service with or without the use of power and in which the fixed capital per head of artisan or worker does not exceed Rs. one lakh, so this is what is the criteria to qualify under village industries. In case of hilly and remote areas the limit is upto Rs. 1lakh and fifty thousand so this is what is the minor difference or such by notification of official gazette , be specified from time to time by the Central Government. There may be minor modifications by releasing a gazette so the State Government can do that. But to qualify under village industries so this is the criteria, if the investment of up to Rs1 lakh per artisan is there so then it comes under the village industries. So why I am telling this thing is the next slide what we are looking at, so it gives us an idea about how exactly the village industries are contributing for the employment generation as well as its investment. So this figures that we have already seen so about 488 lakh total working enterprises that we have in the MSME sector and which is generating employment for the 1,114 million of the people. Then coming to the incubators, what we were talking of the generation of innovative ideas in case of our previous discussion. Just to sustain that type of innovations coming from different corners of the society. So one example that I quote at the case of national innovations foundation especially in agriculture sector but as far the service as well as the production sector is considered government has established about 138 incubators in different parts of the country which have already come out with 503 different innovative ideas for a period of time so which are being commercialized and government is also supporting those ideas and now those ideas are being commercialized by different ventures which are qualifying under the micro small and medium enterprises (MSME). So this is what was the purpose wherein we were defining especially the village industries. , Khadi and Village industries sector is one of the important sector as far the small scale industry is considered. And we have observed constant growth in case of the, Khadi and Village industries sector and it is one of the potential employer also and it is one of the potential institution which is giving sustainable livelihoods for the rural communities. So when we try to separate Kadhi as well as the village industries, so both the figures are here, so the production figures of khadi is about Rs. 674 crore and its sales is about Rs 792 crores it means they are running with a profit of around Rs 120 crores. And if you add village industries to that which is having the production worth Rs. 21000 crores and its sale is around Rs 27961 crores, it means there profit is around Rs 7000 crores. But together the Khadi and village industries it is coming to Rs 7150 crores. So this is what is the potential, this is the net profit Rs 7200 plus crores of rupees what khadi and village industries are earning, apart from that they are generating employment for about 13 or 14 of crores people. This is what is the potential that is hidden in the small scale industries that too supported by the institutions like khadi and village industries commission in Indian context. So, just to quote one incident here, so as far as the khadi and village industries are considered so if any individual who is having his own small manufacturing unit, the biggest problem he or she is going to face is the marketing. He cannot compete with the established brands that are already available in the market. But on the contrary khadi and village industries commission has already become a brand and they have their own marketing outlets and they have their own purchasers, their own followers. The khadi and village industries is also supporting such unidentified manufacturers who are starting their business ventures with very very meager investment of their own or may be supported by the government. So you can sell your produce in the outlets of the khadi and village industries so that you get a marketing support with the help of the khadi and village industries outlets. Because they have a nationwide outlet, whatever the quantity that you are going to manufacture and supply it to the nearest khadi and village industries shop so that they will provide you the marketing support above they will be having a minor meager amount of margin with them for that support and the major beneficiary is the micro producer in the later stages he can establish his own brand and he can be an independent man or he can continue with the same, means this type of opportunities are also their associated with the khadi and village industries commission. So one more interesting scheme which is promoting the innovation as well as the rural entrepreneurship which is supported by the ministry of micro medium and small enterprises is that is ASPIRE. The full form is A Scheme for Promoting Innovation and Rural Entrepreneurship. It is working with the objective of promoting entrepreneurship culture in India which is aid to be taken off at the national level, it is in the very primitive stage that we can say as on date and as we have seen the studies of the international monetary fund which is telling that India is already under trading to the extent of 70 to 80% of its potential it is only because we do not have the entrepreneurship culture in the country. The moment we inculcate such culture automatically the scenario is going to be changed but it takes it own time. The second objective with which this ASPIRE programme is working is the grassroot economic development at the District level. So that we can ensure the development of looks and corners of the villages and ultimately it is contributing to the national change. Then to facilitate the innovative business solutions for unmet social needs and the last objective is to promote innovations to further strengthen the competitiveness of MSME sector. So this is another important objective with which that they are working with because they want to promote the innovations to strengthen their own competitiveness. For which they have specified the funds to support the innovations , to support the ideas, innovative ideas which will be utilized to the automation of agricultural practices which is on the priority sector as far as the ASPIRE is considered wherein you can submit your ideas. As a result of that there are good numbers of innovations that we can see that are available. Then the value addition to the agriculture and the forest produce, recycling of pre and post harvest wastages which is very very less as on date but that needs to be strengthen. Then the business models for aggregation and value addition of relevant for rural areas, then business models for local employment in rural areas which is another priority of MSME just to prevent the problems like migration and the business models for generating the social impact. With all these objectives ASPIRE program is working for which the funds are designated. So with this now we have made an attempt to understand how a ministry of the government of India that is ministry of micro medium small enterprises is working for development and nurturing the process of entrepreneurship. With this we are closing our discussion today. In the next class we will be playing Tower building.

ThankYou

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