World Bank team to study SSI sector in UP

A team from the World Bank is scheduled to visit Lucknow today. The focus of the team will be primarily on small-scale industries.

It will meet the principal secretary (small-scale industries), Govindan Nair, to discuss the development and promotion of small-scale industries.

Meanwhile, in order to develop and facilitate SMEs, the Uttar Pradesh government has issued a notification with guidelines catering exclusively for the needs of micro, small and medium enterprises (MSME) based on the Micro, Small and Medium Enterprises Development (MSMED) Act 2006.

"In UP, the number of registered units till March this year was 5.6 lakh, which had an investment of around Rs 5,400 crore and provided employment to more than 21 lakh people. However, it has been estimated that only 10-15 per cent units got registered because registration is not mandatory," said Govindan Nair, principal secretary (SSI).

Seeing the fierce competition in this sector, which called for a clear categorisation of micro, small and medium enterprises; the MSMED Act 2006 was in place.

To make things simple, the government has dispensed with the cumbersome process of registration.

Now the entrepreneur falling under any manufacturing category, namely, micro (maximum investment of Rs 25 lakh); small (investment above Rs 25 lakh to Rs 5 crore) and medium (investment above Rs 5 crore and up to Rs 10 crore) will only have to submit an Entrepreneur's Memorandum (EM) in two phases.

After setting up the unit, another submission by entrepreneurs and final acknowledgement by the District Industries Centre (DIC) will imply that the unit has been established. The submission of the EM is optional for micro and small enterprises.

Therefore, for the first time it has been made mandatory for manufacturing medium-scale industrial units to file the memorandum.

Similarly, service sector enterprises have also been defined in terms of their investment in equipment (excluding land and buildings). Enterprises with investment of up to Rs 10 lakh will be recognised as micro; small-scale enterprises will be those with investment above Rs 10 lacs and upto Rs 2 crore and those enterprises which have investment above Rs 2 crores and up to Rs 5 crore will qualify for the category of Medium enterprises.

Filing of memorandum is optional for all the three categories in service sector.

Emphasizing on the importance of proliferation of small scale enterprises in the society Nair said, "The average investment in a small scale enterprise is approximately Rs 1 lac and each such unit employs 4 persons at an average, which makes MSME sector the second-largest employer in the production segment in India. Hence, it is in the interest of socio-economic upliftment of a vast section of population to implement the provisions defined in MSMED Act 2006 properly and quickly".

"Acting swiftly the government of Uttar Pradesh has taken adequate steps to constitute the 'Facilitation Council' to monitor and implement the provisions of this Act and this council is likely to become functional with in next few days. Instructions have been issued to the DICs for conducting extensive publicity and awareness programs by organizing meetings of various industries associations and also exposure workshops for existing and potential entrepreneurs", he added.