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Logistics cost, Capital cost and Power cost are stopping MSMEs from blooming, says Nitin Gadkari


Union Minister of Micro Small and Medium Enterprise (MSME) Nitin Gadkari on Monday highlighted the key issues such as Logistics cost, Capital cost and Power cost which are putting obstacles to take MSME from 29 per cent to 50 per cent growth path and to add another 5 crore jobs in the present 11 crore.

While speaking at the inauguration of National conclave on Energy Efficiency in Micro, Small and Medium Enterprises, Gadkari said,'' As we want to take MSMEs contribution from 29 per cent to 50 per cent in country's GDP and also we want to add another 5 crore jobs, but there are some barriers like   Logistics cost, Capital cost and Power cost which are stopping it from becoming a reality''

''Logistics cost are high in our country as compare to China where the cost is around 8 to 10 per cent and in our country is 16 to 18 per cent while in European countries this cost is 12 per cent. Due to this cost we can’t able to compete in international market,'' he said.

Gadkari stressed on water route to decrease Logistics cost,'' For the last five years i was the Ports and Shipping company and during that tenure we develop water route and we are trying to use it excessively.  From Prayagraj to Haldia the work of water route has been completed and from Haldia to Bay of Bengal and we have also completed Brahmaputra water route.''

‘’And now we are working on Yamuna water route which will connect Delhi to Mathura Agra and from Agra to Etawa and then Prayagraj. This will help to reduce our logistics cost. We will be spending on Rs 1 through water route as compare to Rail and roadways.’’  

The Minister said that if the logistics cost can be curtailed then the exports can be increase to 1.50 per cent.

Commenting the Capital cost, the Minister said,'' As compare to other countries where capital cost are 2, 3 and in some countries its 1 per cent, but in our country for MSME, its 11 to 14, per cent. Our second mission is to reduce capital cost. We have signed an MoU with World Bank, ADB and we have received larger credit line with low interest rate.''

''We need to reduce power cost too in this country,'' he said.




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