Working Groups for the Eleventh Five Year Plan (2007-2012)

Micro and Small Scale Enterprises and Agro and Rural Industries

Dated 08 June 2006

In the context of the preparation of Eleventh Five Year Plan (2007-2012), it has been decided to set up a Working Group on micro and small enterprises (MSE) sector, consisting of the traditionally defined small scale industries and small scale service and business entities, on the one hand and khadi, village and coir industries, on the other.

The terms of reference and composition of the Working Group will be as follows:-

(I) Terms of Reference:

1. To deliberate on the basic aspects of the approach to the Eleventh Plan (2007- 2012) relating to development and growth of SSE and tiny sector as well as conceptual issues, keeping in view the ongoing process of economic liberalisation, WTO regime, Regional Trade Agreements and other comparable large countries impact on Indian economy.
2. To critically appraise the policies, programmes and achievements of SSI sector, including small scale,khadi, village and coir industries, in relation to production, employment (both direct and indirect) and exports during the Tenth Plan period and to analyse the reasons for shortfalls, if any, and suggest appropriate remedial measures.
3. To suggest a policy framework and corresponding measures (schemes/ programmes) for the micro and small (manufacturing) enterprises, consistent
   with social and economic objectives of the Eleventh Plan for the sector with particular reference to employment generation, technology upgradation (for
   modernization, productivity improvement, higher competitiveness and, hence,) exports, supportive credit policies and practices, marketing support,
   training need of entrepreneurs, etc. Monitorable annual targets for each area may be suggested for the Eleventh Plan. Attention may also be given, in this
   context, to policies and measures (schemes/programmes) for MSEs engaged in provision of services and expansion of self employment opportunities
   through them, incentives for both manufacturing and service MSEs to graduate to medium enterprises, and enhancing competitiveness of MSEs to
   enable them to face the challenges of globalization,regional free trade agreements, etc. 
4. To suggest measures (schemes/programmes) for increasing the productivity of individual workers/artisans/entrepreneurs as well as their groups/clusters through training, better access to improved tools, equipment and processes, provision of common facilities, facilitating compliance with prescribed quality standards, etc.
5. To suggest measures for dispersal of small scale industrial activities, particularly in relatively backward states/areas, hill areas, rural areas and effective reduction of regional imbalances in industrial growth.
6. To suggest a policy framework and corresponding measures (schemes/programmes), on the lines of ii) above, for MSEs in the khadi, village and coir industry sectors.
7. In the light of the physical targets suggested for the Eleventh Plan period for production, employment and exports, to make estimates of Plan outlays required for promotional/developmental schemes and the investment required in the sector to achieve the above targets.
8. To assess the extent of synergy between Government (Central as well as State-level) agencies, on the one hand , and voluntary and other organizations, particularly MSE associations, on the other and recommend strategies and measures for strengthening the latter and improving their interface with the former on a collaborative-participative and sustainable basis.
9. To assess the requirements of institutional finance/credit(term loan as well as working capital ) for projected growth of the entire MSE sector and meeting the sub-sectoral targets, suggest measures for ensuring actual delivery of credit accordingly and also recommend innovative financial instruments and corresponding legislative and implementation mechanism to encourage and enable the MSEs to acquire corporate and/or limited liability partnership status and access capital markets, venture capital funds, etc.
10. To review the existing Central and State-level facilities for training and entrepreneurship development for both first generation and operating MSE entrepreneurs, estimate the gaps noticed during the Tenth Plan period and suggest measures to meet the requirements in quantitative and qualitative terms for the Eleventh Plan.
11. To recommend effective marketing strategies and corresponding measures (schemes/ programmes) with a view to addressing the issues of (a) regular availability of critical/scarce raw materials, (b) expanding markets of MSEs (both SSI and ARI segments) products and services within the country and outside, particularly the latter (i.e exports),(c) the role of consortia, State Small Industrial Development Corporations, NSIC, Khadi Commission, State Khadi and Village Industries Board , large trading houses etc. (d) more accurately quantifying the direct and indirect exports by the sector, (e) suggesting annual targets of exports by the sector during the Eleventh Plan and (f) corresponding support measures.
12. To review the existing mechanisms for data collection, planning and monitoring at the Central, State and Local levels and recommend measures to improve them with a view to building up and regularly updating a comprehensive database for the entire MSE sector.
13. To review the working of the existing R and D institutions and suggest (a) measures for their reorganisation, revitalisation and linkages with counterpart/corresponding R and D establishments in defence, electronics, material sciences, nanotechnology etc, on the one hand and universities, colleges, IITs, TIFAC etc. on the other and (b) suggest appropriate time-bound R and D programmes and technology missions and mechanisms for their dissemination, delivery, commercial application and patenting to/by the user MSE.
14. To review the existing strategies and measures for commercial linkages of MSE with medium and large enterprises and recommend appropriate strategy and mechanism for incentivising medium and large enterprises as well the MSEs to build sustainable vendor development and quality upgradation networks.
15. To examine the feasibility and desirability of bringing all MSE products under quality certification by upgradation of quality standards, testing facilities, etc.
16. To identify key areas and explore ways for implementing Public-Private Partnership model in identified areas for sustainable development of sector.
17. To review the existing coverage of developmental schemes/ programmes for SC/ST/Minorities/Women engaged in the sector and to suggest specific measures for their upliftment and promotion.
18. To make such other recommendations as are considered appropriate.

(II) Composition of the Working Group