A Parliamentary panel has sought an assessment of how the government’s Make In India (MII) initiative has helped the micro, small and medium enterprises (MSME) in the country. It also said dedicated measures should be made to ensure that Foreign Direct Investment (FDI) promotes the MSME sector.
The Department Related Parliamentary Committee on Commerce and Industry also asked the government to share with it the factors behind Foreign Portfolio Investments turning negative and its impact on the Indian industry. Given the large population of youth in the country, the Parliamentary Standing Committee on Commerce also wanted the assessment to show if the MII programme — aimed at boosting manufacturing in India and generating jobs mainly for the youth after ensuring that they get opportunities to skill themselves through skill development programmes — has seized the opportunity of the demographic dividend.
The panel, chaired by Bhupinder Yadav, MP, Rajya Sabha, recommended that manufacturing growth in the country become robust. “The manufacturing sector has grown only by an average of 1.6% in the last five years till 2015-16,” it said.
‘Capital goods crucial’
Stating that the capital goods sector is crucial for the industrial growth of the country, the panel said, “appropriate measures may be taken to revive the growth of the capital goods sector.” On industrial development of backward and remote areas, the panel said, “possibility of giving suitable subsidy may be explored for industries investing high capital, which may be ₹500 crore or above in select sectors like food processing and other employment generating industries congenial to the region.”
On proposals to boost export performance, the panel said a healthy increase in the allocation of the Interest Equalisation Scheme would enable greater coverage and help augment export competitiveness, which otherwise, had been adversely affected by high rate of credit. Professionalism needed to be infused in the working of the Directorate General of Trade Remedies so that maximum benefit of the country’s foreign trade potential may be reaped, the panel said.
At the same time, the panel urged the department of commerce to tackle non-tariff barriers faced by Indian exporters, with a particular focus on small and medium enterprises that who lack an understanding of such barriers and miss out on export orders.
The committee also said that it is of prime importance that the Export Credit Guarantee Corporation of India (ECGC) should be infused with adequate equity to bolster its networth. “ECGC coverage may be broadened. To begin with the government must ensure that at least 20% of the exports are covered within 2017-18,” it said.Among other suggestions, the panel said “priority must be accorded for creation of necessary infrastructure to facilitate robust trade and commerce in the North East. Ministry of Finance may be approached for necessary enhancement in the budgetary allocation for the purpose.”
