Muniyappa fast tracks jobs scheme

MSME ministry has set a target of training more than 42 lakh persons in the 12th Plan

Interview of the Week

Congress vice-president Rahul Gandhi is eyeing the youth, who constitute 65 per cent of the population. To capture the imagination of the young, the Congress-led UPA Government has come up with an aggressive programme for jobs creation for the youth, which will have a multiplier-effect. Every youth trained to start a small unit, in turn employs 8-10 youths. Under the novel jobs creation scheme, youth would be imparted training in entrepreneurship. Union Micro, Small and Medium Enterprises (MSME) Minister K H Muniyappa is fast-tracking Rahul Gandhi's jobs scheme.

Under the scheme, the District Collector selects youths, who are provided training for a period of three months. In another three months time, bankers will have to disburse loans to these youths, which would help them to set up their own units in six months time. "Nearly 65 per cent of the population comprises youth. India's young demographic profile has the country favourably placed in terms of manpower availability.

Keeping in view the increasing number of youth joining the job market in the coming years, the MSME Ministry has set a target of training more than 42 lakh persons during 12th Five-Year Plan. If the youths get training, they can find jobs, either by entering the job market through the skill development provided to them or by setting up their own units, where they can offer jobs to 8-10 more persons," Union MSME Minister K H Muniyappa, in an exclusive interview to The Hans India, told Venkat Parsa

What are the salient features of the new jobs creation plan? Nearly 65 per cent of the population comprises youth. India's young demographic profile has the country favourably placed in terms of manpower availability. Keeping in view the increasing number of youth joining the job market in the coming years, the MSME Ministry has set a target of training more than 42 lakh persons during 12th Five-Year Plan. If the youths get training, they can find jobs, either by entering the job market through the skill development provided to them or by setting up their own units, where they can offer jobs to 8-10 more persons. The training is provided by the state-of-the-art 10 Tool Rooms and eight Technology Development Centres, which help create quality workforce for the industries. During the 12th Plan period, we plan to set up 15 more Tool Rooms and technology centres in different states. In fact, I want to approach the World Bank for loan to set up more Tool Rooms. Unlike MGNREGA, which guarantees 100 days employment in a year to the rural poor, this scheme seeks to provide sustained employment or self-employment.

What is the procedure followed under this scheme? The District Collector selects the prospective entrepreneurs at the district level, who are imparted training for three months. In the next three months, banks are required to process the loan applications of the trained youth and the same has to be disbursed. Thus, in 6 months time, a unit could be set up, which, in turn, employs another 8-10 youths.

Is any PSU Bank coming forward to help this new venture of yours? The Canara Bank, a public sector bank, is launching a new term-loan for extending Quasi Equity (Risk Capital) assistance to MSMEs for meeting the bonafide expenditure required for the growth of business. Many other banks would also take similar such initiatives for promoting growth of MSMEs. Wherever I go, I am holding meetings with the leading banks. In fact, all leading banks have to appoint one General Manager for the MSME. Besides, I am also holding discussions with the state chief ministers.

How do you propose to persuade banks to ensure credit flow to the small enterprises? To ensure better flow of credit to MSMEs by minimising the risk perception of banks/financial institutions in lending without collateral security, the government is implementing the Credit Guarantee Scheme. The scheme provides guarantee cover of up to 85 per cent on collateral-free credit facility extended by lending institutions to new and existing MSMEs for loans up to Rs100 lakh. Under this scheme, more than 11 lakhs proposals have been approved till April, 2013, providing guarantee cover for total sanctioned loan amount of Rs 54,322 crore.

Is alternative funding possible? With a view to providing SMEs the access to alternative sources of funding, as per recommendation of the Prime Minister's Task Force, two dedicated Stock Exchange/ Platform for MSMEs have already become operational in National Stock Exchange (NSE) and Bombay Stock Exchange (BSE). The MSME Exchange platform will enable MSMEs to raise funds and get listed as public entities. This will transform the ways through which SMEs can have access to investor capital and create wealth for all the stakeholders.

Have you fixed a target for launching new micro enterprises? The government has approved the introduction of a new credit-linked subsidy programme called Prime Minister's Employment Generation Programme (PMEGP). Under PMEGP, the flagship employment generating programme of the ministry since its inception in 2008-09, more than 2.10 lakh new entrepreneurs have been assisted so far up to March 31 this year, creating about 19.55 lakh employment opportunities across the country by disbursing Margin Money (i.e. subsidy) to the tune of Rs 3973.05 crore. In the 12th Five-Year Plan under PMEGP, an ambitious target of 4 lakh new micro enterprises has been fixed for creation of new employment opportunities for around 32 lakh persons mainly focusing on the unemployed youth throughout the country, with an outlay of Rs 7,800 crore.

Is there any move for a new cluster development programme? Yes. We have a specific scheme. India has a rich tradition in traditional industries. The eco-friendly products of traditional industries not only have great potential for growth in production and export but can also lead to widespread generation of employment opportunities in the rural areas of the country. With a view to making the traditional industries more productive and competitive and facilitating their sustainable development, the Central Government announced the setting up of a fund for regeneration of traditional industries. The Scheme of Fund for Regeneration of Traditional Industries (SFURTI) is a major scheme for cluster development. The MSME Ministry plans to support about 800 clusters in the country under SFURTI. In addition, large numbers of industrial clusters are being taken up under Cluster Development Programme (CDP).

Is there a move to make procurement mandatory for Government from the MSME units? The MSME Ministry has notified a new Public Procurement Policy for Micro & Small Enterprises (MSMEs) effective from April 1, 2012. The Policy mandates that 20 per cent of procurement of annual requirement of goods and services by all Central Ministries / Public Sector Undertakings will be from the micro and small enterprises. The government has also earmarked a sub-target of 4 per cent procurement of goods & services, out of the 20 per cent, from MSMEs owned by SC/ST entrepreneurs. This provides huge business opportunities for MSMEs of the country in government procurements.