SPEECH BY HER EXCELLENCY THE PRESIDENT OF INDIA, SHRIMATI PRATIBHA DEVISINGH PATIL AT THE PRESENTATION OF NATIONAL MICRO, SMALL AND MEDIUM ENTERPRISES AWARDS

New Delhi, 2nd September 2011

Ladies and Gentlemen,

It gives me immense pleasure to participate in the National Awards function of the Ministry of Micro, Small and Medium Enterprises (MSMEs) for the second year in succession. Firstly, I congratulate the award winners. This is an acknowledgement of their accomplishments and should inspire them to reach new horizons of success, as also encourage others to excel.

A significant feature of the Indian economy since Independence has been the rapid growth of the small scale industry. With low capital investment, these enterprises play a very important role in creating employment opportunities, providing vital components and accessories for the large manufacturing sector and widening the entrepreneurial base. The Micro, Small and Medium Enterprises sector continues to retain its dynamism. It makes a significant contribution to domestic production and to increasing exports. Moreover, it enables about 60 million persons living in urban and rural areas to earn their livelihood. It is in fact, the second largest employer, after agriculture in our country. Therefore, to meet the objective of growth with equity, it is essential that there is an enabling eco-system for such enterprises to grow and prosper.

The MSME units in India are highly heterogeneous in terms of their size, the levels of technology employed and variety of products and services produced. They manufacture a wide range of products, from traditional crafts and simple consumer goods, to highly sophisticated products like micro-processors, electronic components, and electro-medical devices. Another notable feature is that more than 50 percent of them are located in rural areas. This sector therefore, has the capacity to accelerate economic activity in rural areas, by using local resources, local skills and providing people employment in their close vicinity.

Overall prosperity in our country cannot happen without substantial rural prosperity. I have on several occasions called on the corporate sector, including MSMEs, to seriously engage with agriculturists and farmers, to avail of the many opportunities of working together for mutual benefit. Strengthening the agricultural sector by linking it with other sectors - services, research and manufacturing will bring great returns. Aligning agricultural activities with the momentum of growth in the economy will broaden the nation's prosperity base. Farmers are also entrepreneurs in their own right. The farmer is the owner of the land and constitutes the biggest class of private proprietorship in our country. Like the industrial entrepreneur, the farmer takes risk, sows the seeds, puts in tremendous effort and waits for a good monsoon, as agriculture in our country is still dependent on the vagaries of the monsoon, as any business takes a risk in starting and manning it. In spite of all difficulties, farmers are feeding the nation. There are many ways in which companies can develop better linkages with agriculture, to make it a profitable proposition from improved agricultural inputs - seeds, fertilizers, machinery to post-harvest value addition and marketing. Farmers should be looked at as agri-preneurs who interact with business units to work out win-win options. MSMEs should take interest in this. They can act as a vital link between our traditional and modern sector, which can bridge divides through the creation of forward and backward linkages, so that the fruits of economic growth percolate down. They should also be encouraged to preserve our indigenous knowledge and cultural heritage. Khadi and village industries, so deeply entrenched in our national consciousness, constitute an integral part of the MSME sector, and deserve full encouragement. Innovative designing and marketing can greatly enhance the use of these products. The coir industry is another segment, which generates large scale employment, especially for women. Goods made from coir, especially geo-textiles, are eco-friendly products that hold a special appeal in an environmentally aware world.

MSMEs have greater potential for growth, which will be possible if we can address some of these constraints and difficulties. The problems faced by the sector are varied and diverse. I am informed that to look into the issues and concerns of the sector in a holistic manner, a Task Force was formed by the Government of India, and its recommendations are currently under implementation through various initiatives. I would like to highlight some of issues, which need constant attention and focus.

Foremost, among them is skill development. India's demographic dividend needs to be nurtured to create a vast pool of skilled manpower as a vital resource for all economic endeavours. MSMEs would be in great need of a talented pool of young people both as potential entrepreneurs and as skilled workers. I am informed that various entrepreneurship and skill development programmes are being conducted by the Ministry of MSMEs, through its network of field offices across the country. However, our efforts need to be amplified substantially, to meet the target of creating a massive number of trained manpower. It should be our mission to make India a 'Talent Hub' for the world through quality training, that meets global standards and fulfill the requirements of the 21st Century.

Secondly, availability of adequate credit on time is paramount to their success. It must be kept in mind that it is the vulnerable unorganized enterprises, because of the very nature of operations, especially of the traditional cottage industries, which are still perceived as risky by financial institutions, and suffer the greatest constraint in terms of access to credit. Timely financial support is absolutely essential for their survival. I would urge special attention to this aspect, and the evolving of innovative financial service facilities to meet the demand.

Similarly, infrastructure, technology, product development and marketing, are other critical areas for sustainable and stronger growth of the sector. In today's competitive globalized environment, creation of cost effective and quality conscious 'Brand MSME' is a pre-cursor to its expansion. These entrepreneurs need to look at both product and market diversification, to tap unexplored markets with a wider product basket. In India itself, there is a growing middle class, and if their requirements are surveyed, the domestic market itself can become more broad-based. Focused attention will have to be given to Research and Development, to evolve production infrastructure and processes, that are efficient and cost effective. I am informed that the National Manufacturing Competitiveness Programme, with ten innovative components, seeks to address the technological and marketing requirements of the sector. I am hopeful that these efforts will generate a wide array of innovative products and processes, that are competitive and environment-compliant. Technology and innovation can be the real game changers for making the MSMEs sector the breeding ground of entrepreneurship and individual creativity. Further, creation of adequate infrastructure is the key to facilitate a conducive environment for growth. The cluster development programme is a laudable effort, which aims at holistic and integrated development of the sector. It enables better targeting of beneficiaries and creation of economies of scale. This has to be further intensified and structurally better organized.

I urge all stakeholders of the sector, including State Governments and industry leaders, to synergize their efforts and work in tandem, so that MSMEs could be supported in a harmonized manner for robust growth. The Call Centre - 'Udyami Helpline', recently launched by the Ministry of MSMEs, is a single point facility to disseminate information to enterprises on various schemes, including guidance on how to set up a unit and access loans. Such outreach facilities assume great significance for facilitating flow of information and thereby, creating more awareness.

Once again, I congratulate all the award winners and hope that their success would inspire millions of entrepreneurs, to embrace the same path to lead the country to remarkable progress. I am sure that under the leadership of Shri Virbhadra Singh, Minister for Micro, Small and Medium Enterprises, this sector will advance significantly.

Thank you.

Jai Hind!