MSME Sector Profile

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MSME classifications

India Scenario

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• 6.33 crore MSMEs across various industries, employing over 11 crore people in 2017-18

• Over 6000 products ranging from traditional to high-tech items are being manufactured by the MSME Sector inaddition to provide wide range of services

28% of India’s GDP

40% of India’s Exports

45% of India’s Manufacturing

Output

21% of Employment, 2nd highest after

agiculture

`National Contribution by MSMEs

Overview

Source: Annual Report 2017-18, Ministry of Micro, Small and Medium Enterprises, Government of India

39.85%

8.75%6.94%

6.20%

3.77%

34.48%

Leading Industries: MSME Sector

Retail Trade, Except of Motor Vehicles andMotorcycles; Repair of Personal and HouseholdGoodsManufacturing of Wearing Appearel; Dressingand Dying

Manufacture of Food Products and Beverages

Other Service Activities

Other Business Activities

Others

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MSME Strengths

Make in India

■ Conducive policies and favorable incentives for foreign investors

Exports

■ Presence of SME Export Promotion Council

■ Global Demand for Value Added Products

Conducive Policies

■ Credit support

■ Quality assurance

■ Encouraging entrepreneurship

Skill India

■ An initiative to train over 40 crore people in India in different skills by 2022

Strong Local Demand

■ Growing population

■ Increasing number of large industries

■ Sector Specific Clusters

■ Special Economic Zones

■ Industrial Corridors

Digital India

■ Robust IT infrastructure

■ Transparent and integrated government services

Robust Infrastructure

Factors for MSMEs success

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Credit Support

• Credit Guarantee Fund for Micro and Small Enterprises

Guarantee cover of 75% of the credit facility up to INR 50 lakh and 50% of the credit exposure above INR 50 lakh and below INR 1 crore

• Micro Finance Programme

7.5% of the loan amount is provided by central government through SIDBI

• Providing financial assistance on International Cooperation

Up to 95% of airfare and space rent for entrepreneurs for participation in international events and to MSME business delegations

• Financial assistance to set up new enterprises under PMEGP

Subsidy is provided at 15% and 25% for Urban and Rural Areas respectively for beneficiary belonging to general category and 25% and 35% for Urban and Rural Areas respectively for beneficiary belonging to Special Category*

• Funding support for implementing ‘Lean Manufacturing’ projects

80% of the cost of lean manufacturing consultant

Government of India Initiatives (1/3)

Sources: http://msme.gov.in/web/portal/Scheme.aspx . Special Category consist of SC / ST / OBC / Minorities / Women, Ex-servicemen, Physically handicapped, NER, Hill and Border areas

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Government of India Initiatives (2/3)

Assistance for Quality Control and Standardization

• Financial assistance under Performance and Credit Rating Scheme

75% of the fee is reimbursed for carrying out rating through empanelled rating agencies

• Funding support for conducting ‘QMS (Quality Management Standards) Awareness’ workshops

• Reimbursement of registration fee for Bar coding

Promoting Entrepreneurship

• Support for setting up of ‘Business Incubators’

• Scheme for 'Entrepreneurship Skill Development Programmes (ESDP)'

• Scheme for 'Supporting 5 selected universities / colleges to run 1200 entrepreneurship clubs per annum'

• Scheme for 'Trade Related Entrepreneurship Assistance and Development (TREAD) Scheme to Women'

Sources: http://msme.gov.in/web/portal/Scheme.aspx

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Government of India Initiatives (3/3)Skill Development

• Assistance to Training Institutions Scheme

• Funding support for setting up ‘Mini Tool Rooms’ and Training Centers under PPP mode

• Scheme for 'Strengthening of Training Infrastructure of existing and new Entrepreneurship Development Institutions'

Technical Support

• Scheme for 'Marketing Assistance and Technology Up-gradation of MSMEs'- an NMCP (National Manufacturing Competitiveness Programme) Scheme

• Scheme for 'Technology and Quality Upgradation (TEQUP) Support to MSMEs'- an NMCP Scheme

• Scheme for 'Promotion of ICT in Indian Manufacturing Sector (ICT)'- an NMCP Scheme

Marketing and Design Assistance

• Marketing Assistance Scheme

• Funding support for implementing ‘Design’ projects

• Funding support for conducting assessment of IPR related needs of MSMEs

Others

• Scheme for 'Micro & Small Enterprises Cluster Development Programme (MSE-CDP)

• National Awards under various category

Sources: http://msme.gov.in/web/portal/Scheme.aspx

Gujarat Scenario

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A manufacturing powerhouse

1stNumber of Industrial

Entrepreneur Memorandums (IEMs) filed and implemented

in India in the last 10 years

Gujarat’s contribution to India in key products (% output)

91%

78%

65% 62%

53%

32%26%

19%

Gujarat is a leader in Chemicals, Petrochemicals, Dairy, Drugs and Pharmaceuticals, Cement and Ceramics, Gems and Jewellery, Textiles and Engineering

35.5%Share in

Gujarat’s GSDP in 2016-17

Source: Gujarat Socio – Economic Review 2017-18; DIPP; ASI 2015-16

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Leading FDI destination

Source: DIPP

15%

11%

10%

10%

6%

48%

Automobiles

Telecommunications

Cement & Gypsum Products

Power

Chemicals (other than Fertilizers)

Others

Top 5 sectors attracting maximum FDI inflows(Jan 2000 to Mar 2017)

• Gujarat was amongst the top three FDI attracting states in India in 2016-17

• Gujarat received FDI inflows worth INR 113,347 Crore (USD 17.44 billion) between Apr 2000 and Dec 2017, accounting for 5% of the total FDI inflow into India

FDI grew at a CAGR of ~58% between 2013-14 and 2016-17

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Gujarat ranks among the top three in the country across various industrial indicators

Source: Annual Survey of Industries

17.01 16.82

10.19

6.38 6.24

Maharashtra Gujarat Tamil Nadu Karnataka UttarPradesh

Percentage share in India's total output

19.9716.86

10.2

6.02 5.13

Percentage share in India's total net value addition

16.01

12.110.48

7.01 6.56

Tamil Nadu Maharashtra Gujarat AndhraPradesh

UttarPradesh

Percentage share in India's total factories

16.2413.79

10.92

7.06 6.57

Percentage share in total persons engaged in India

16.82%of India’s total

industrial output

16.86%of India’s total

net value addition

10.48%of India’s total

factories

10.92%of total persons

engaged in India

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Gujarat ranks among top three states in industrial output in leading MSME manufacturing sectors

Pharmaceuticals

Chemicals

Textiles

Food Products

Machinery and Equipment

Rubber and Plastic Products

Source: Annual Survey of Industries Statistics 2015-16

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Gujarat rated as Top Performing State in 2017, as per NCAER State Investment Potential Index

Source: National Council for Applied Economic Research (NCAER)

• Gujarat secured 1st rank among 21 peer states on key factors critically linked to investments, industrial and economic activity in any state

• Overall, Gujarat secured top position on six parameters assessed:• Land• Labour• Infrastructure• Economic climate• Political stability & Governance• Business perceptions

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106 activity clusters have been identified across the state

CategoryNumber of

Clusters

Engineering 21

Chemicals 23

Textiles 18

Mineral based

industry

16

Agro &Food

Processing

07

Others 21

Others

Paper Products

Plastic Products

Textile Industry

Food Products

Chemical Industry

Engineering

Mineral Products

MSME clusters in Gujarat

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Sources: Industries Commissionerate , Government of Gujarat

IndustryTotal MSMEs

Registered from 2006-2015

Textiles 105463

Machinery and parts except electrical 30159

Mining and Quarrying 6578

Food Products 9106

Chemical & chemical Products 12131

Wood Products 4623

Rubber & Plastic Products 8784

Non-metallic mineral Products 6362

Basic Metal Industries 25872

Paper Products & Printing 6837

Electrical Machinery and Apparatus 7780

Transport equipment and parts 3114

Leather Products 6762

Beverages, Tobacco & Tobacco Products 1625

Service Activities 47816

Trading Activities 72920

Others 20416

Total 376348

Manufacturing63%

Service Activities

Trading Activities

19%

Others5%

Industry wise Break up of MSMEs (up to 2nd Oct 2015)

Sector wise distribution of MSMEs in Gujarat

17Note : The data for 2015-16 is up to 20-Oct-2015.Sources: Industries Commissionerate , Government of Gujarat,

NSS 73rd Round

• Total number of MSME(s) registered in Gujarat from 2006 to Sept. 2015: 3,21,181

• Since, 20-Oct-2015 new MSMEs are registered under Udhyog AadharMemorandum (UAM) instead of EM-II.

• Total 2,93,358 MSMEs have been registered under UAMs in Gujarat till date

Micro – 2,39,037 ; Small – 52,404; Medium – 1,917

2010-2011

2011-2012

2012-2013

2013-2014

2014-2015

2015-2016

No.of Units 27940 79721 147955 206581 270740 321181

Investment ( Rs. In Lacs) 890264 2051714 3343874 4617159 5976188 7231582

Employment 264867 627738 1008825 1392067 1802500 2064244

0

50000

100000

150000

200000

250000

300000

350000

0

1000000

2000000

3000000

4000000

5000000

6000000

7000000

8000000

Cumulative Growth of MSMEs in Gujarat

Growth of MSMEs in Gujarat

Rise in registrations in MSME units between Aug 2016 and Dec 201786%

3.3 Million + MSME units in Gujarat according to NSS 73rd Round (2015-16)

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Support for MSMEs strengthened in Gujarat 2018-19 budget

Rs. 450 Crore for cottage and rural industries

Rs. 35 Crore for promotion of

Khadi

Rs. 16.5 Crore for marketing of goods produced

by artisans

Rs. 50 Crore allotted as Start-Up

fund for MSMEs

Source: Gujarat Finance Department

Rs. 843 Croreallocated towards

development of MSMEs

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Government provides holistic support to MSMEs

Financial Assistance

• 50% decrease in price of

plots up to 3,000 sq m offered to MSME units as of May 2018

• Industrial infrastructure Development work of Rs 975 crore to be undertaken

under Gujarat Investment Promotion Program

Sources: Industries Commissionerate, Government of Gujarat

• MSMEs facilitation / help desks in 11 cities – Ahmedabad, Vadodara, Surat, Gandhinagar, Rajkot, Bhavnagar, Valsad, Bharuch, Anand, Mehsana and Bhuj

• To provide guidance & information on various schemes of the state and central government

• To create an enabling ecosystem for MSMEs

• To facilitate and provide hand holding support for the development & growth of MSMEs in Gujarat

MSME Commissionerate MSME facilitation desks

Assistance to MSMEs under various policies

• Capital Investment Subsidy• Interest Subsidy• Assistance for Venture Capital• Technology Acquisition Assistance • Assistance for Environment

Protection Measures• Special incentives for women

entrepreneurs

Development of MSME Parks / sheds

• 4 dedicated MSME parks in Sanand, Juned, Halol and Bardoliwith plot size in the range from 250 – 500 sq.mtr.

• Dedicated Women industrial park in GIDC Sanand spread across 18.3 ha

Skill Development• Skill development assistance

provided to MSMEs

• More than 50 Skill Up-gradation Centers (SUCs) have been developed for imparting training in various GIDC estates

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A robust policy infrastructure to support MSMEs

Aerospace and Defense Policy 2016

Agri-Business Policy 2016

Health Policy 2016

Electronics Policy 2016

IT Policy 2016Biotechnology

Policy 2016

General Incentives Scheme 2016

Industrial Policy 2015/2016

Startup Scheme 2015

Wind Power Policy 2016

Tourism Policy 2015

Manufacturing Policy 2013

Textile Policy 2012/2013

Solar Power Policy 2015

Garment & Apparel Policy 2017

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Sr no. Scheme Incentive

1 Assistance on Capital Investment Subsidy

10% (upto 15 lakhs) -15% (upto 25 lakhs) on term loan amount disbursed by bank/ financial institution

2 Assistance for Interest Subsidy 5-7% Interest Subsidy

3 Assistance for Venture Capital 20% of Project Cost provided as promoter funding

4 Assistance for Quality Certification 50% of fees/ costs incurred for obtaining various quality control approvals

5 Assistance for Technology Acquisition Up to 50% of the cost of acquisition of new technology

6 Assistance for Patent Registration Up to 75% of total cost/expenditure incurred on obtaining the patent

7 Assistance for Saving in Consumption of Energy & Water

Up to 75% cost of energy/water audit recognized institution/consultant

Incentives to MSMEs under Gujarat Industrial Policy 2015 (1/2)

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Sno. Scheme Incentive

8 Assistance to SMEs for raising Capitalthrough SME exchange

Up to 25% of expenditure incurred on raising funding from the SME exchange

9 Assistance for Reimbursement of CGTMSE Fees

Reimbursement of 100% Service Fee paid on collateral free loans of INR 1 crore to banks and financial institutions by women entrepreneurs, SC/ST, physically challenged

10 Rehabilitation of Sick Enterprises 50% of expenditure incurred on preparation of diagnostic report from expert/expert agency as per the Draft Rehabilitation Scheme

11 Assistance for encouraging ‘Green Practices & Environmental Audit’

• Financial assistance of up to 75% for audit fees and up to 25% of cost of monitoring systems

• Financial assistance of 35-50% of cost of Environment Management System and Occupational Safety equipment

12 Market Development Assistance Financial assistance for rent payment for participation at State/ National/ International level exhibitions

Incentives to MSMEs under Gujarat Industrial Policy 2015 (2/2)

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Skillset development

• Intake capacity of 71,799 engineering students

• Over 7 lakh graduates added to the state talent pool every year

• More than 8 lakh candidates have been imparted computer & IT

training through eMPOWER

• Annual capacity to train more than one million candidates

• 800 Industrial Training institutes (ITIs)

• Centres of Excellence (CoE) funded by World Bank under

Vocational Training Improvement Project (VTIP) scheme

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■ Promotes industrial development by bringing about industrial reforms

■ Monitors and Controls functions for planned industrial development

IndustriesCommissionerate

(IC)

■ iNDEXTb was set up as a ‘facilitating’ organization to ensure smooth and hassle-free experience for a prospective investor

■ iNDEXTb provides information to the public in general and entrepreneurs in particular, regarding the opportunities available in the State of Gujarat for industry, commerce, trade, business openings and participation therein

Industrial Extension Bureau

(iNDEXTb)

■ GIDC has been created for securing the orderly establishment and organization of industries in industrial areas and industrial estates in the state

■ To fulfill the above mandate, the Corporation has established 202 industrial estates, ranging from mini to mega sizes. It has also developed 5 Special Economic Zones

■ GIDC is now establishing 11 Special Investment Regions in tune with the changing economic and industrial scenario

Gujarat Industrial

Development

Corporation

(GIDC)

Organizations for promotions of MSMEs

Source: http://ic.gujarat.gov.in/, http://www.indextb.com/, http://www.gidc.gov.in/

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MSME-DI (formerly Small Industries Service Institute), Ahmedabad covers the entire State of Gujaratcovering 33 districts and Union Territories of Dadra & Nagar Haveli, Daman and Diu.

The Institute with its 2 Branch, Small Industries Service Institutes, one each at Rajkot and Silvassa and oneField Testing Station, Ahmedabad, serves the small scale industries in these areas

http://www.msmediahmedabad.gov.in/

Micro, Medium and Small Industries Development Institute

■ The program, 'SME Banking & Financial Services' has been designed to facilitate an in-depth understanding and develop skills in assessing financial needs of SMEs and designing appropriate financial intermediation

http://www.ediindia.org/

Entrepreneurship Development Institute of India

■ To develop entrepreneurs in state at urban and rural areas so that they can start their manufacturing or service venture for the economic growth and become self employed as well as provide employment to others.

■ The Entrepreneurship Development Program (EDP) develops confidence in a person to establish his own venture and manage it successfully

http://www.ced.gujarat.gov.in/

Center for Entrepreneurship Development (CED)

Institutes for Assistance to MSMEs

Sources: http://www.msmediahmedabad.gov.in/, www.ediindia.org/, http://www.ced.gujarat.gov.in/

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Ease of Doing Business

Ease of Doing Business in Gujarat

• Pre-defined timelines for 90 business related applications

• Robust monitoring mechanism at District and State level

Grievance Redressal Mechanism

Gujarat Single Window Clearance Act 2017

Features of Investor Facilitation Portal (IFP)• Create/ add multiple projects

using single login id

• Common Application Form

• SMS/ Email alerts

• Digi-Locker to upload documents

• Online Tracking of application

• Integrated payment gateway

• Digitally Signed Certificates One Stop Information on IFP• Process Flows, Checklists

and Timeline for 90 Applications

• GIS based Land Banks

• Sector specific Policies

• Sector Profiles

• Bureau of Indian Standards

• Verify third party Certificates

• Track/ Raise online grievance

• Time bound service delivery in 7 days

• Dedicated Toll free number

• Dedicated grievance redressal officers

www.ifp.gujarat.gov.in

Source: Gujarat Investor Facilitation Portal

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Consistently ranked amongst top 3 Indian states in Ease of Doing Business

rankings

Govt. of Gujarat launched the ‘Gujarat Single Window Clearance Act, 2017’,

to ensure that all necessary clearances are provided to investors in a time-bound manner

'Investor Facilitation Portal‘ - a single window online platform which

acts as the first point of contact for any prospective investor looking to invest in Gujarat

Gujarat: Best in India for doing business

1

1st

Complying with environmental

procedures

2nd

• Allotment of land • Complying with

labor regulations• Carrying out

inspections

3rd

Enforcing Contracts

Source: DIPP statistics and World bank Statistics Ranking

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Setting up business in Gujarat

Step 2:

Land Related approvals

1. Land Allotment – GIDC

2. Property Registration (in Case of Non GIDC)

3. Change of Land Use

4. Tree cutting and Tree Transit permission

Step 3:

Pre Establishment Approvals

1. Consent to Establish under Air & Water Act by GPCB

2. Building Plan approval by ULB / GIDC

3. Approval of electrical plan by Chief Electrical Inspector (for HT connections)

4. Approval of Factory Plan by Directorate of Industrial Safety and Health (DISH)

5. Registration under Building and Other Construction workers Act

6. Electricity Application

7. Water Connection Application

Step 4:

Pre-operation Approvals

1. Boiler registration, Boiler License

2. Boiler Erector Certificate

3. Boiler Manufacturer Certificate

4. Consent to Operate under Air & Water Act by GPCB

5. Building Use permission by ULB / GIDC

6. Certification of Electrical Installation by Chief Electrical Inspector

7. Factory License by Directorate of Industrial Safety and Health (DISH)

8. License for contractors under provision of The Contracts Labour Act

9. Registration of principal employer's establishment under provision of The Contracts Labour Act

Step 1:

Company Registration

1. Udyog Aadhar / IEM

2. Company Registration / Partnership firm

3. Apply for PAN

~ 45 – 60 days each for Step 2, 3 & 4

All applications can be made at Single Window Portal www.ifp.gujarat.gov.in Step 1 takes < 1 Week

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Automotive

• Automotive electronics

• automotive components

• Defence automotive

• Rubber and chemicals supply to the tyre

Pharmaceuticals

• Generics and API manufacturing

• Contract research

• Nutraceuticals and nutracosmetics

IT/ITes

• Cloud Computing

• Social media and mobility

• Data analytics services

Electronics

• ESDM including semiconductor design, electronic components design and hi-tech manufacturing

• Electronic components

Healthcare

• Low cost medical devices

• Medical consumables Diagnostic labs

Textiles

• Raw fabric and dye production

• Processing & Packaging

Engineering and Process Equipment

• Engineering solutions segments like chemicals and petrochemicals, pharma and automotive

• Next generation automation tools

• Green Engineering

Chemicals

• High performance chemicals

• Opportunities PCPIR

• Petrochemicals

• Textile chemicals

Agro and Food Processing

• Processed and packaged food

• Dairy products

• Cold chain storage

Defense Offset:

• New age information systems, communication platforms, simulators and equipment

Considering the expected growth trends in the top industry sectors and areas, MSMEs can look to expand their share in some of the industries mentioned below, in times to come

Future outlook and investment opportunities

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Thank you

www.imd-gujarat.gov.in

www.ic.gujarat.gov.in

www.indextb.com

www. ifp.gujarat.gov.in