The ministry of micro, small and medium enterprises has decided to seek expansion of a subsidy scheme to acquire new technologies for the sector to compete in the global market.
"We are now wanting to expand our credit linked capital subsidy (CLCS) scheme for acquisition of technology. We want to start this process in this fiscal year itself or definitely in the 12th Five-Year Plan beginning next year, subject to green signal from the Planning Commission," MSME Secretary Uday Kumar Varma said.
Under the current CLCS scheme, upfront 15% capital subsidy is given to micro and small enterprises for loans up to Rs 1 crore availed by them for modernisation of their equipment.
A sum of Rs 348 crore has been allocated to this scheme for enhancing efficiency of MSEs in this financial year (2011-12).
Poor access to credit, infrastructure and latest technology are some of the challenges faced by the MSME sector.
The MSME ministry has already submitted the proposal to the Planning Commission in this regard, he said.
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Further, he said, the ministry will expand and provide liberal budget allocation for this scheme during the 2012-2017 Plan period.
"...This is something which is critical for SMEs to become globally competitive," he added.
The MSME sector contributes eight% to India's gross domestic product, 40% to the country's exports and 45% to the total manufacturing output.
The sector provides employment to 60 million people through 26 million enterprises.