Gujarat has been a leading light when it comes to big-ticket investments; as was evident from the recently concluded Vibrant Gujarat Global Summit. However, the highlight, of the sixth edition of Vibrant Gujarat Global Summit (VGGS), was the tremendous enthusiasm and large-scale participation by SMEs. Out of 17719 investment intentions signed during the summit, 12886 investment intentions came from the SME sector.
Gujarat, with its strong tradition of business and entrepreneurship, abundant natural resources, sound and efficient infrastructure facilities and a supportive Government has a thriving SME sector. Fifteen percent of the total operational MSMEs in the country are from Gujarat. Additionally, the MSME sector accounted for 28 percent of the Gross State Domestic Product in 2011. There are over 3.9 lakh registered and almost 26 lakh unregistered Micro, Small and Medium Enterprises in Gujarat.
Understanding the importance of the SME sector, the Govt. of Gujarat has provided encouragement and support to ensure its rapid development. At the recently concluded Vibrant Gujarat Global Summit, Shri Modi underlined his support for Industrial Development by saying, “It is our job to ensure [Industry’s] progress and reduce [Industry’s] difficulties.”
On January 12th 2013, as a part of the Vibrant Gujarat Global Summit, Shri Modi addressed an impressive SME convention at Mahatma Mandir in Gandhinagar. The convention highlighted the SME sector’s role as a key driver of employment and innovation.
In his speech, the Chief Minister explained his vision for the development of the SME sector and encouraged Indian businesses to compete in the Global Market. “We are getting products from all over the world. We have to compete with those products. According to me the solution, is to provide better and cheaper products. We must provide goods, which are reliable, which last. We should not have a defensive mindset, instead we should dream about selling products to the world”
Shri Modi expressed confidence in Brand Gujarat’s ability to cement its place in the Manufacturing World and highlighted the importance of small industries and the Government working together to ensure trustworthy products. Giving Japan’s example, the Chief Minister invited SMEs of the state to unite in building a Strong brand, on the lines of the ‘Made in Japan’ brand. He said, “It is difficult for Individual businesses to make their place in the world. We need to come together and build a credible brand on the lines of ‘Made in Japan’ brand.”
He further went on to say, “Earlier, when people bought a product which said ‘Made in Japan’ they would not care who the manufacturer was.” This vision given by the Chief Minister was widely hailed and covered across mainstream and social media.
Shri Modi, spoke about the importance of SMEs incorporating new technologies. He also highlighted the importance of securing Intellectual Property Rights for SMEs and the need for ensuring wider dissemination of path-breaking technologies developed by Indian SMEs. Further, Shri Modi highlighted the significance of SMEs as generators of employment. He declared, “We want an economy with mass production and production by masses. The SME sector can help in generating substantial employment for the youth.”
Additionally, Shri Modi drew attention to the government’s initiatives to support and assist SMEs. He spoke about the government’s focus on the cluster development approach, proposed establishment of ITI courses tailored to industry needs and setting up of a new unit to assist industries with patenting laws. Shri Modi also mentioned the government’s efforts to increase transparency in governance and the positive effect this had had on Industrial growth.
In his concluding remarks, Shri Modi outlined his vision for the development of the SME sector. He said, “I want to incorporate new technology and make new innovations in the SME sector and ensure a skilled work-force for the SME sector.”
The Government of Gujarat has undertaken consistent efforts to promote and foster the development of SMEs. The Government of Gujarat had laid out robust provisions in its Industry Policy (2009), to aid and assist the growth and expansion, of the MSME sector. Provisions include an Interest subsidies scheme, efforts to rehabilitate underperforming industrial units through financial assistance, monetary assistance to large industries to support the establishment of ancillary and auxiliary units and the establishment of a Technology Acquisition Fund to provide financial assistance to MSMEs,
Understanding the importance of the ‘Cluster Development Method’ to advance MSMEs, the Government included special provisions in the Industrial Policy to provide financial assistance for the development of such clusters. The state has 83 product clusters spread across 88 locations in the state. The Industrial Policy also emphasises interventions such as capacity building of cluster enterprises, 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’s vision is every indication that the SME sector is set to witness incredible growth in the years to come. The Gujarat Government’s Textile Policy (2012) is expected to bolster Small and Medium enterprises in the Textile sector. Similarly, sector specific Industrial Estates and Industrial Regions, including the Petroleum, Chemicals and Petrochemicals Industrial Region (PCPIR) are expected to provide a boost to the SME sector. Additionally, to support the booming Automobile sector, the Government intends to set up Electronic System Design and Manufacturing clusters accross the state.
The Government’s efforts have borne fruit and Gujarat’s SME sector has grown at an astounding pace. According to data announced by Govt. of India Officials, while the growth rate for small industries in India is only 19%, the rate of growth for the SME sector in Gujarat is 85%.