MP mulls to set up additional SME clusters

NEW DELHI, INDIA: The Madhya Pradesh government has assured to consider The Associated Chambers of Commerce and Industry of India's (Assocham) proposal to set up 20 SME clusters on public private partnership (PPP) model to boost industrial activites in the state.

“The state government approves of the e-clusters concept proposed by Assocham that will promote small and medium enterprises (SMEs) and will generate mass employment for inclusive growth,” said Kailash Joshi, Member of Parliament from Madhya Pradesh at an interactive session with Parliamentarians organised by Assocham here on Friday.

“We will soon facilitate a meeting between the state industry minister and the corporates interested in setting up cluster industries and will also lend our support in getting loans and advances from the banking and financial sector,” said Joshi.

SMB clusters of India

In its study on Cluster Development for Inclusive Growth in Madhya Pradesh, the Assocham had earlier proposed setting up of 20 SME clusters each accommodating about 1,200 units with a potential to create over five lakh direct and indirect jobs.

Total funds required to provide basic and essential infrastructure to these clusters is estimated to be around Rs 650 crore. Once functional, it will contribute additional 10 per cent revenues per annum to the exchequer and will help in inclusive growth and simultaneously lead to upgradation of existing clusters, according to the study.

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“The chief minister has also taken certain initiatives towards setting up a cluster development authority for optimum utilization of funds and to assist them in gearing up for further growth,” said Sumitra Mahajan, Member of Parliament from Indore.

“The state is blessed with abundant raw material, skilled work force and holds tremendous potential for cluster development to regain investment in varied SME segements,” said Mahajan. “But the state has been grappling with lack of basic infrastructure especially transportation facilities and thus, there is an urgent need to develop an export hub on the Indore-Ratlam-Bhopal route and enhance the connectivity.”

According to the Assocham study, more than 6,500 clusters are currently operating pan India but only 450 are recognised by the government. Of these, only seven clusters currently operate in the state.

Existing clusters are not able to sustain growth and development process due to use of obsolete technology, plant and machinery, thus, there is a need to interconnect all clusters among themselves by adopting e-Cluster Model to provide them with a level playing field and make it globally competitive. Recognition of more clusters by the government will bring inclusive and balanced growth and promote unique Cluster Branding of Madhya Pradesh, said the study.

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The 20 additional clusters recommended by Assocham are: Bhopal (engineering equipment), Dewas (electronic goods), East Nimar (powerloom), Indore (food processing), Indore (auto components), Jabalpur (readymade garments), Jabalpur (powerloom), Ujjain (powerloom), Bhopal (handloom, powerloom), Sehore (block and screen printing, zari, zardozi, food processing), Ashok Nagar (crafting & embroidery), Vidisha (carpet cane, zari, zardozi, powerloom), Chindwara (handloom, auto component), Shivpuri (embroidery, food processing), Bherugarh (crafting & embroidery, textile hand printed, auto component), Jhabua (cane and bamboo, crafting & embroidery, jewellery), Guna (handloom, food processing), Tikamgarh (crafting & embroidery, handloom, powerloom), Katni (handloom, powerloom) and Datia (cane and bamboo, crafting & embroidery).

ASSOCHAM had also organised an investmart in Madhya Pradesh which attracted huge industrial investment in the state as MoUs worth a staggering Rs 2.5 lakh crore across varied sectors like IT, biotechnology, food processing industry, agro-based industry were reportedly signed.

Public-Private Partnership (PPP) will bring value addition through synergies between public authorities and private sector companies more particularly through the integration and cross transfer of public and private sector skills, knowledge and expertise, cost effective delivery of projects, design and construction of infrastructure.

Besides, e-Cluster model facilitates SME stakeholders for easy and speedy co-ordination between members, entrepreneurs, buyers-sellers and enables them to access vital information about marketing, best/profitable market price, market news and government notification.

The government assistance to unassisted clusters could improve the contribution of the MSME sector to GDP and make available additional jobs. The gains of cluster development have not yet been fully appreciated and understood, according to the Assocham study.

MSME sector is estimated to employ around 59 million people in over 26 million units throughout the country. Further, this sector has consistently registered a higher growth rate than the rest of the industrial sector.

There are over 6,000 products ranging from traditional to high-tech items, which are being manufactured by the MSMEs in India. It is well known that the MSME sector provides the maximum opportunities for both self-employment and jobs after agriculture sector.