Cabinet note ready, policy to be out in two months
In a major boost to the domestic Micro, Small and Medium Enterprises (MSMEs), the Centre has decided to reserve 20 per cent of all government purchases for the sector.
"A Cabinet note on the proposed policy is ready and the government expects the policy to be out within two months," Union MSME Department Secretary Dinesh Rai said here.
He was holding a meeting with MSME chamber Indian Industries Association (IIA) on the development of Khadi and village industry and the MSME sector.
Rai highlighted the important recommendations of the MSME Task Force constituted by Prime Minister Manmohan Singh in August 2009 for the growth of the sector, especially in the backdrop of economic slowdown. The reservation of 20 per cent government purchases for MSMEs was one of the recommendations.
"The implementation of the Task Force recommendations will greatly benefit the MSMEs, especially in the rural areas," he added. IIA was a member of the Task Force and was represented by its president Anil Gupta.
The Centre will institute a high level council to monitor implementation of the task force's recommendations and agenda for action even as the budgetary allocation for the sector has been raised to Rs 2,400 crore for 2010-11.
Earlier, over 500 commodities were exclusively reserved for manufacture by the MSMEs, which were hitherto referred to as tiny, small and medium sector, and later small-scale sector.
However, with the process of liberalisation rolling and the objective of the government to make the sector globally competitive, this reservation not only started to wither, it also lost its significance in the changed business scenario, IIA executive director D S Verma told Business Standard.
Meanwhile, IIA has proposed a partnership with Khadi and Village Industries Commission (KVIC) to promote entrepreneurs in rural areas of Uttar Pradesh.
IIA discussed the implementation of Rajiv Gandhi Udyami Mitra Yojana (RGUMY) and Prime Minister Employment Generation Programme (PMEGP) with the senior central and state government officials in the meeting.
