FISME coordinating feedback with MSMEs on 2 Champion Services Sector; MoMSME to held meeting on Oct 30
New Delhi, Oct 22 (KNN) The Government of India has tasked different Ministries to come up with development plans for the twelve Champions Services Sectors that were identified by the Ministry of Commerce and approved by the Cabinet in February 2018.
The Ministries are in the process of consultation for policy support to impetus to their growth and thereby create more employment opportunities.
The 12 champion sectors identified by the Government were - Information Technology & IT enabled Services (IT & ITeS); Tourism & Hospitality Services; Medical Value Travel; Transport & Logistics Services; Accounting & Finance Services; Audio Visual; Legal Services; Communication Services; Construction & Related Engineering Services; Environmental Services; Financial Services; and Education Services.
A dedicated fund of Rs 5,000 crore has been set up to support initiatives for sectoral Action Plans of the Champion Sectors.
Given that the champion sectors have a major role of micro, small and medium enterprises (MSMEs), the Ministry of MSME, in a meeting held recently, asked different associations to submit their proposals to increase productivity and competitiveness of these sectors which shall further boost employment and exports.
Talking to KNN India, Anil Bhardwaj, Secretary General of Federation of India Micro and Small & Medium Enterprises (FISME) said that FISME is coordinating feedback from the two Champion Sectors-Construction and Related Engineering and Transport & Logistics Services.
The Ministry of MSME will be holding the next meeting on this on October 30, 2018. It has sought views and suggestions from stakeholders from the concerned sectors before that.
Despite contributing about 8% to the GDP, the Construction sector in India has seen one of the lowest growths in total factor productivity since 1980. This needs to be addressed through application of modern technology and taking skilled jobs to the higher end of the construction chain, said Draft Action Plan prepared by the Ministry of Commerce on Construction & Related Engineering Services.
Talking to KNN India, Dinesh Chandra Tripathi, Managing Director of NSD Global, a medium sized glass processing unit based in Mumbai, said, “Access to the market is one of the biggest challenges faced by small engineering industries as bigger players dominate the sector leaving the MSMEs suffering.”
Tripathi, who was also the Secretary of the Federation of Safety Glass (FOSG), the apex body of safety glass manufacturers in India and presently serving as the President of FISME, elaborated that funding is again another issue with this sector as the kind of access bigger industries have smaller industries don’t have, especially the engineering sector.
Suggesting the measures to mitigate these issues, he said the government should come up with a policy of preferential treatment for rewarding the contract and funding those contracts.
Further, K Chandra, President of Small Engineering Industries Welfare Association said, “Issues related to GST are currently posing the biggest challenge for micro industries in this sector.”
He said penalty for delayed filing of 3B returns on GST is creating a problem for MSMEs as they get the payment from customers only after 90 days but the system under GST mandates to file preliminary returns GSTR-3B on the 20th day of every month.
“Whether we are getting the payments or not from customers, we need to pay the GST-3B amount on 20th of every month and on non-fulfillment, the government imposes a fine of Rs 50 per day as a penalty on per day delay basis,” Chandra explained.
Suggesting measures, he said proper payment mechanism should be there for micro industries to address this grave concern.
Highlighting other challenges, he said that micro industries are suffering without any financial aid from the bankers’ side.
Migration of labours is another issues, Chandra said adding that “Our organizations are not big ones and if labourers come from any other place they work for one month and migrate to other bigger organization.”
On Transport and Logistics Sector, the draft action plan said the Transport sector has become an integral part for the economic development of India, and is among the high growth focus sectors in the country. India spends around 14.4% of its GDP on logistics and transportation as compared to less than 8% spent by other developing countries. The sector encompasses road and rail transportation, shipping, aviation and logistics services.
The market has witnessed the consolidation of small and medium size enterprises (SMEs) to provide pan-India presence and improve overall profitability. There is an adequate labour pool available at a low cost, for basic handling and transport jobs, the Action Plan report added.
Talking to KNN India, Naveen Kumar Gupta, Secretary General of All India Motor Transport Congress, said, “The Road Transport Sector is the life line of the nation, backbone of the Economy and an essential services provider. It is one of the highest tax payer to the exchequer and employment generator and yet it is most challenged due to indifferent and apathetic attitude of the Government towards its problems and issues.”
He said most of the issues are simple, reformative in nature and does not have an adverse implication on Government’s revenue.
“The biggest challenge to us are the retrograde and regressive policy for this sector which does not create an enabling environment but enthuse corruption and harassment,” Gupta added.
Citing example, he said, “We are asking the Government for Toll Barrier Free India and suggesting that toll could be collected efficiently by additional cess on diesel and petrol.”
He argued that it will save our trade and the country more than Rs 1.5 lacs crore on account of wastage of fuel and delays as against collection of Rs 23,000 cr annual toll revenue.
The logistics cost which is highest in the world, he said adding that about 15-18% will reduce and benefit common man, farmers and the industry, import bill will come down, environment degradation will reduce, it will bring economic viability in this sector and our exports will get competitive.
Next most important thing is that our freights are not cost based and rising diesel cost, Toll, Third Party Premium, Tyre and Chassis Cost, Corruption Taxes etc are having detrimental impact on this sector. The freights do not increase in proportion to the operational cost as they depend on the market forces of demand and supply, the All India Motor Transport Congress Secretary General added.
He cried that the government too remains unconcerned to the acute conditions of this sector and the small operator having 1 to 5 truckers, which constitutes 87% of the trucking population is on the edge just like farmers and are unable to meet EMIs and a decent square meals for their families.
In a background note, Ministry of Commerce said “The identified Champion Sectors are based on four pillars aimed at giving an impetus to these sectors viz., New Processes-for improving ease of doing business, New Infrastructure–for strengthening physical and digital connectivity, New Sectors–based on identifying sectors with untapped potential for value addition, employment generation and technology up-gradation and a New Mind-set–aimed at changing the official mind-set from ‘issuing / approval authority’ to ‘partnering in business’ to create a business-friendly environment, which are equally relevant to the Services Sectors.
An additional pillar of introducing New Standards is proposed, as the role of standards in shaping the export competitiveness of various services sectors is becoming an increasingly important aspect in shaping global trade in services,” the background note added.
In the note suggests setting a target of achieving a share of services in Gross Value Added (GVA) of 60 % (67% including construction services) for the year 2022. (KNN Bureau)