No discussion about the Industrial Development in Gujarat is complete without a mention of the Special Economic Zones, the Tata Nano Manufacturing Plant and other Mega-projects. Because of the visionary leadership of Shri. Narendra Modi, the big corporate houses from India and abroad are flocking to Gujarat. At the same time, lakhs of ‘naano’ industries are also prospering in Gujarat; these are the unsung heroes of the Gujarat growth story.
There are over 4 lakh registered and almost 26 lakh unregistered Micro, Small and Medium Enterprises in Gujarat. Micro, Small and Medium Enterprises (MSMEs) are defined as those with investments in equipment less than 25 lakhs, 5 crores and 10 crores respectively. In Gujarat, MSMEs primarily cover the Textile (21.4 percent) Metal Products (31.9 percent) and Chemical products (7.6 percent) sectors. It is no surprise that Gujarat, with its strong tradition of business and entrepreneurship, has a vibrant MSME sector.
*GIDC areas in the state
The Government of Gujarat has laid out robust provisions in its Industry Policy (2009), to aid and assist the growth and expansion of the MSME sector. An Interest subsidies scheme has been initiated to provide assistance for the establishment of new enterprises and the expansion and modernization of existing enterprises. The Government is also taking efforts to rehabilitate underperforming industrial units by providing financial assistance for the diagnostic studies of such units. Additionally, in order to ensure the development of MSMEs in areas with mega-projects, the Government provides monetary assistance to the large industries to support the establishment of ancillary and auxiliary units.
The Government of Gujarat, known for its innovative governance methods, understands the importance of new technologies in business. Hence, the government has set up a Technology Acquisition Fund to provide financial assistance to MSMEs, which wish to incorporate new technologies to improve products and processes. Additionally, to promote innovation in SMEs, the Government has made provisions to provide Venture Capital Funding through FI/Nodal Banks for projects which adopt innovative technologies.
Understanding the importance of the ‘Cluster Development Method’ to advance MSMEs, the Government has included special provisions in the Industrial Policy to provide financial assistance for the development of such clusters. The Industrial Policy also emphasises interventions such as capacity building of cluster enterprises through marketing initiatives, technology up-gradation initiatives, quality improvement and training/skill up-gradation initiatives, creation of cluster-specific common infrastructure and facilities, creation of an incubation centre, establishment of ITI extension centres and other need-based facilities.
The Government of Gujarat also intends to help MSMEs explore new markets by arranging their participation in trade fairs. The Gujarat Government will also support the Gujarat SME manufacturing Summit, to be held in April 2013, which aims to ‘‘equip the manufacturing SMEs to prepare themselves thoroughly for assessing the business opportunities and take necessary actions in developing their enterprises to achieve business goals’’
One of the major reasons for the rapid industrial growth in Gujarat is the availability of excellent infrastructure facilities in the state. Under the leadership of Shri Narendra Modi the Government of Gujarat has made resolute efforts to provide world-class infrastructure for industrial development. Gujarat is the only state in the country to provide 24-hour uninterrupted power supply to all its villages. The World Bank, in a recent report, has praised Gujarat’s roads and has recognized them to be at par with international standards.
*Provision of power provided a major boost to the industrial sector
The Government’s pro-development policies, a result of the extraordinary foresight of the Hon. Chief Minister, have resulted in Gujarat excelling in the MSME sector in India. According to a study by CRISIL, for the year 2010-11, Gujarat-based SMEs posted a 31 percent growth in Net sales compared to the national average of 26 percent. The Net Profit margin for Gujarat-based SMEs was 6.66 percent compared to the national average of 3.75. Moreover, 16 percent of the Industrial Production in India comes from Gujarat alone and Gujarat accounts for 22 percent of the total investments in the country.
DNA – Special Issue ‘MSME – Powerhouse of Growth’