New Delhi, Apr 2 (KNN) The Make in India programme has not only given competition to India's neighbouring countries, but it has also created an environment of competition within India as well. Each state is leaving no stone unturned to woo investors to set up their companies there.

Looking at the broader side, the move seems to boost industrialization in the states. But, in certain cases like the state companies, which are not compelled to buy products from MSMEs, end up taking away the businesses from the hands of the MSMEs and giving it to big players or foreign companies.

On one hand, just like the European and the US markets, government wants to make India as a one single market through Goods and Services Tax (GST) Bill, but some of the policies are leading towards balkanization of the regions.

One such example is a recent announcement by Gujarat Energy Transmission Corporation Limited (GETCO).

In a notification the state discom said, “All those manufacturers, who have required PQR and already qualified as Outside Gujarat (OG – Regular) party in GETCO, shall be considered regular Gujarat Based (GB – Regular) party provided they put up their manufacturing base in Gujarat with registration and Type Test documents as per GETCO’s qualification before the tender.”

The announcement would definitely woo the companies from other states to set up their manufacturing bases in Gujarat. But the question here arises that do the MSMEs have the capacity to put up multiple branches when they are already dealing with numerous problems to run one.

As a result, the big players or the foreign companies like the Chinese, Korean etc who have already infringed into the market earlier acquired by the Indian MSMEs supplying transformers or electrical goods to the discoms.

KNN spoke to various industry experts from the sector on the impact of such announcements, to which most of them said that it would definitely throw MSMEs out of the competition. And they also pointed that not only Gujarat, similar things are happening in many other states as well.

Anil Aggarwal, Managing Director, PME Power Solutions, said, “The Chinese, Japanese and Korean companies are slowly capturing the transformer and electrical market in India. With such sops announced by the states, whatever small portion of the cake that the MSMEs are getting would also go into their hands.”

Aggarwal, who is also a Senior Vice President of FISME, said, “It will hit the low belt MSMEs. When there would be no work, then MSMEs would face recession. The specifications mentioned are fabricated. This is also a step to cut the competition to give priority to Gujarat Industries. This is happening everywhere.”

Further, K.R. Thangarraj, President, Tamilnadu Transformers Manufacturers Association said, “Such moves hurt the MSMEs. The small players should be supported else all the tenders would go to the big players. Just like the central PSUs, some percentage should be fixed for the Indian MSMEs.”

Meanwhile, Ashwani Aggarwal, Managing Director, Nu-Cork Products (P) Ltd, Gurgaon, differed with their opinion and said, “Such criteria does not hit the MSMEs as it all depends on the kinds of products the discoms want to purchase. Every state has levied some tax for companies from other states to protect their domestic companies. The companies from other states become in competitive due to such inverted tax structure. Every state wants to boost industrialization.” (KNN Bureau)