Indian SME Policy Initiatives in 2009

The Ministry of Micro, Small and Medium Enterprises (MSME) started several schemes for the development of micro, small and medium enterprises in India. These schemes offered a great success for the MSMEs in 2009 even after the impact of economic recession.

Priority of Skill Development
Many measures had been taken to enhance the training capabilities of MSME Development Institutes, Tool Rooms, and other organizations which come under the Ministry of MSME. Several programs were organized free of cost for weaker sections of society.

Better Credit Flow
The Policy Package for Stepping up Credit to Small and Medium Enterprises (SME) was established by Indian government in 2005 in order to double the credit flow to the MSME sector within five years. The credit flow which was found to be Rs. 67,634 crore at the end of March 2005 increased to Rs. 1,91,307 crore at the end of March 2009.

Improvement of Competitiveness
The National Manufacturing Competitiveness Programme (NMCP) for MSMEs contain 10 components. Among them, six were operational and these include quality management systems and quality technology tools, support for entrepreneurial and managerial development of MSMEs, building awareness on intellectual property rights, marketing support/assistance to MSMEs, mini tool room scheme, and lean manufacturing competitiveness scheme.

Coverage of Capital Subsidy Spreads
15 percent capital subsidy was provided on loan amounts up to Rs. 100 lakh for upgradation of technology under the Credit Linked Capital Subsidy Scheme for Micro And Small Enterprises (CLCSS). 7810 proposals of subsidy were approved and Rs. 338.68 crore was released to the MSMEs under the scheme until October 2009.

Employment Generation
The Prime Minister’s Employment Generation Programme (PMEGP) was started in August 2008 with a total plan outlay of Rs. 4735 crore that included Rs. 250 crore for backward and forward linkages. 2,17,762 applications were received under PMEGP until March 2009, out of which 83,454 candidates got selected. Until 31st August 2009, loans were disbursed in 25,507 cases by banks which gave employment opportunities to about 2.55 lakh persons.

Apart from these, there were schemes for quality improvement and success of credit guarantee scheme.