Welcome To Chairpersons, Experts, Speakers and Delegates National Workshop On MSME Cluster Developme

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WelcomeToChairpersons, Experts, Speakers and
DelegatesNational WorkshopOn MSME Cluster
Development(28 29 January 2008)Hotel Samrat,
New Delhi
National Resource Centre for Cluster Development
(NRCD)
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Sponsors

• Keynote Address
• Dr. Chukka Kondaiah
• Director General

National Institute For Micro, Small And Medium
Enterprises (ni-msme) Formerly Known as National
Institute of Small Industry Extension Training
(nisiet) (An organization of Ministry of MSME,
Government of India) Yousufguda, Hyderabad 500
045 (A.P.)
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Introduction

• Historically, India is endowed with a number of
  indigenous enterprise clusters
• Predominantly occupational, artisanal and rural
  in nature
• Emergence of manufacturing, hi-tech and service
  enterprise clusters in post-independent era
• Now, over 6,400 clusters in India
• Opened up many opportunities and challenges with
  liberalisation of countrys economy (1991)

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Development of Cluster Strategy Major
Initiatives

• SBIs Project UPTECH - 1988
• UNIDOs Study - 1996
• Cluster development programme (CDP) by UNIDO
  1997
• Policy recommendation by Abid Hussain Committee
  - 1997
• Ministry of MSME (MSE CDP) initiated cluster
  approach 1998
• Textile Committee of India 2002-03
• NABARDs Cluster Development Programme 2003-04

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Development of Cluster Strategy Major
Initiatives

• Ministry of Commerce and Industry (IIUS)2004-05
• Ministry of MSME (SFURTI) 2005-06
• SIDBI World Bank (PMD) 2005-06
• Ministry of Textiles (IHCDP), DC (Handlooms)
  2005-06
• Ministry of Textiles Scheme for Integrated
  Textile Parks 2005-06
• NMCC, NCEUS Traditional Manufacturing 2006-07
• Efforts state governments (Kerala, M.P., Orissa
  and Rajasthan) 2003-05

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International Initiatives

• ILO - Small Enterprise Development (Handicraft)
  2000
• UNIDO CDP, Orissa 2005-06
• SIDBI - Business Development Service for SMEs
  2005-06 (with the support of international
  funding agencies)
• UNIDO - Consolidated Project for SME Development
  in India 2007

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Status and Support to MSME Clusters in India

• Largest number of clusters in the world (6,400
  estimated)
• Traditional Manufacturing 400
• Artisan/Rural/Indigenous/Occupation6,000
• Estimated employment 75 lakhs
• Manufactured exports of Indias Total 60
• Accelerated cluster development with the
  initiation of Ministry of MSME 2003
• Emergence of NRCD at ni-msme with the support of
  DC, MSME Jan.2004

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Status and Support to MSME Clusters in India

• No. of Schemes/Programmes in operation 24
• Ministries of Government of India involved
  MSME, Textiles and Industry and Commerce
• Other Ministries to be involved Food Processing,
  Rural Development and Tribal Affairs
• Financial and support institutions involved SBI,
  SIDBI, NABARD, NMDFC, NEDFI and NMCC

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The Workshop Relevance

• Estimated resources to be invested in cluster
  development Rs.3,400 4,000 crore in next five
  years
• Stakeholders of Cluster Development Institutions/
  Organisations
• Six central ministries (likely more to join)
• Financial institutions (FIs)
• State governments
• Technical agencies (TAs)

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The Workshop Relevance

• Implementing agencies (IAs)
• Public/ private BDS institutions
• National R D Laboratories
• Industry associations/networks
• Premier professional institutions
• International support and financial agencies

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The Workshop Relevance

• A decade of Cluster Development
• 24 schemes supported 1,358 clusters (278
  manufacturing and 1,080 micro enterprises)
• Several billions of rupees spent on cluster
  development programme (actual figure to be
  ascertained)

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Aim of the Workshop

• Bring together and synergise the efforts of
  stakeholders, to deliberate on specific themes to
  meet future opportunities and challenges
• Make recommendations to central ministries, state
  governments and stakeholders from the proceedings
  of the workshop to accelerate cluster development
  in the country
• Enable economic growth through MSME cluster
  development

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Theme 1Policy Implications for Cluster
Development

• Cluster definition facilitating policy adoption
• Role clarity NA, IA, TA, CDA/E, NDA, BDS
• BDS development for wide interventions (including
  international BDS)
• PublicPrivate Partnerships (PPPs)
• Environmental compliance
• Institutional collaboration in soft and hard
  interventions
• Appropriate resource allocation
• Actionable cluster development policy in Central
  Ministries and State Governments

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Theme - 2Clusters Employment Generation and
Poverty Reduction

• Cost per employment in MSEs Rs.0.72 lakh as
  against Rs.5.80 lakh in large industry
• Deliberate and develop strategy for employment
  intensive and poverty reduction clusters
• Skill upgradation, quality, market expansion,
  prototype development
• Social capital and empowerment
• Development of entrepreneurial qualities among
  cluster actors

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Theme - 2Clusters Employment Generation and
Poverty Reduction

• Credit support current status and future need
• Cost-benefit analysis hard and soft
  interventions
• Infrastructure development as per the requirement
  of stakeholders (CFC, raw material banks, storage
  points, common production centres, distribution
  channels etc.)
• Employment intensive clusters and large industry
  linkages

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Theme 3Business Development Services

• Inadequacy of BDS providers for hard and soft
  interventions
• Involvement of premier professional institutions
  (IITs, IIMs, national institutes, industry
  associations, private institutions, national
• R D institutions)
• Continuity and sustainability of BDS
• Information support for international BDS
• Development of BDS in energy, environment and HR
  audits
• Learning experience from successful BDS
  interventions (GTZ)

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Theme 4Investment Promotion Technology
Transfer

• Induce adaptable technologies for more
  investments
• Encourage technological innovation among
  artisan/rural clusters
• Learning experience from UNIDO consolidated
  project for SME development in India (cluster
  twinning, mutual credit guarantee and technology
  transfer)
• Role of venture capitalists
• Financial schemes for innovative technologies
• Application of ICT in clusters

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Theme 5Cluster MSME Financing and Development

• Initiatives for specific financial products,
  particularly micro enterprise clusters
• Enhance the limits of Mutual Guarantee Scheme
  (currently Rs.1.00 lakh per unit to a maximum of
  10 units)
• Further simplification of sanction procedures
• Credit guarantee scheme vis-à-vis cluster
  associations/ consortia
• Creation of cluster finance divisions in apex
  national banks
• Experience sharing of SIDBI (with international
  funding agencies)
• Micro finance products for artisan/rural clusters

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Theme 6Infrastructure Development Common
Facilities

• Ensure proportionate fund allocation based on
  cluster requirement (e.g., SFURTI, IHCDP and
  MSECDP)
• Plan compatibility of hard interventions with
  cluster actors
• Examine relevance of BOT Scheme
• Speedy clearance for land procurement
• Facilitate cluster actors to effectively manage
  SPV and CFC
• Promote viable technology as per cluster needs
• Role of professional organisations/management
  consultants for implementation
• Soft skills development in the management of
  infrastructure facilities
• Establish effective linkages between institutions
  and cluster associations

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Theme 7Cluster Development Implementation
Strategy

• Role clarity of Nodal Agency (NA), Technical
  Agency (TA), Implementing Agency (IA) and CDA/E,
  NDA
• Promote more competent TAs/service providers
• Develope competent CDA/E, NDA and technical
  advisers
• Adequate resource deployment for TAs and IAs
• Realistic action plans and budgetary support
• Review of DSRs by professionals/agencies with
  cluster actors
• Participatory approach among stakeholders for
  action plan implementation
• States role (involvement and commitment of
  governments)

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Theme 7Cluster Development Implementation
Strategy

• Need for pressure groups within the cluster for
  speedy implementation
• Flexible duration of implementation
• Integrate BDS in the implementation
• Strengthen associations/consortia
• Encourage tax compliance by cluster actors
• Evaluation and monitoring of interventions
• Cluster development as a remedial measure for
  social maladies (e.g., child labour, alcoholism,
  gender inequality, health and sanitation)

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Theme 8Future Directions

• Formulation of relevant cluster development
  policies at central and state governments level
• Policy review mechanism and suitable suggestions
• Promote clusters and networks for participation
  in global value chain
• Encourage business linkages between MNCs and MSME
  clusters
• Encourage the cluster actors on IPR compliance
  and GI Rights
• Enhance cooperation between clusters of similar
  products within the country and other countries
• MSME cluster development as a teaching module in
  professional institutions

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Theme 8Future Directions

• Promote innovation to face global challenges
• Develop cluster professionals in supporting
  agencies
• Develop suitable methodology for artisan/rural
  clusters
• Develop induced clusters (on the lines of SEZs)
  new policy and implementation
• Develop business information hubs/networking
• Share Indian success and mutual learning
  partnership with other countries

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Thank you