An increasing number of Indian MSMEs are embracing technology and this is what will surge the share of the sector in the nation’s economy; exports and manufacturing set to surge in the coming years, according to a new report,. The report had said that the credit availability is a concern for the sector.
According to the paper MSMEs cluster Development –Deepens Inclusive growth brought out by the associated chamber of commerce and industry (ASSOCHAM) the MSME sector that has been growing at 35 per cent over the last two years will register a 40 per cent growth that will be technologically driven and contribute to manufacturing outputs to an extent of 46 per cent from the present 40-42 per cent.
The paper says that MSMEs contribution, including agricultural as well, to national GDP is projected to go up by a minimum of 5 per cent and touch 55 per cent of India’s GDP by 2011 since over 55 percent of MSMEs are aggressively upgrading themselves technologically to reduce their input costs and increase production and exports.
The MSMEs share, including agriculture-share, in national GDP is measured around 45 per cent.
The ASOCHAM says that the recent downturn has strengthened the MSME sector and specifically the SME segment that supplies critical components and ancillary parts to a host of large industries like Auto,Agro Implements,Construction Equipments,Electronics,etc.
The credit that MSMEs get are at a high cost the ASSOCHAM paper says and it points out that over 55 percent of SMEs have done technological tie –ups with their counterparts to upgrade their production facilities.
The ASSOCHAM chief said that the proposed SME exchanges will provide opportunities to SMEs to raise capital for the capacity building as well as price preference. He said that the recent high power committee’s recommendations and procurement policy of the government to source 20 percent of its requirements of goods and services from MSME sector would be crucial to the sector.
MSMEs produce over 7500 items and provide employment to more than 600 lakhs people. About 60 lakh MSM units are spread across the country.