1 Jawhar Sircar Additional Secretary & Development Commissioner Ministry of Micro, Small & Medium Enterprises Government of India 04 April 2008 NATIONAL MANUFACTURING COMPETITIVESS PROGRAMME Micro, Small & Medium Enterprises (MSME)

2 Formulation of NMCP announced in Budget It is to support MSMEs and :   Ensure MSME Sector Grows at a Healthy Rate   Draft ‘National Strategy for Manufacturing’ 10 Schemes drawn up under NMCP at Rs. 973 crore Implementation of Schemes to be in PPP Mode Programme deals with Firm-Level Competitiveness, addressing issues of Competitiveness against Global Challenges NATIONAL MANUFACTURING COMPETITIVENESS PROGRAMME (NMCP)

3 Marketing Support/Assistance to MSMEs BAR CODE Support for Entrepreneurial and Managerial Dev INCUBATORS Enabling Manufacturing Sector to be competitive thru Quality Mgt. Standard & Quality Tech. Tools QMS/QTT National Campaign for Investment in Intellectual PropertyIPR National Programme on Application on Lean Mnf. LEAN Mini Tool Rooms proposed to be set up by Min. of MSME MTR Promotion of ICT in Indian Manufacturing Sector ICT Technology & Quality Upgradation Support TECH UP Design Clinic Scheme for design expertise to Mnf. sector DESIGN Marketing Assistance/SMEs and Technology Upgradation Activities - Ministry of SSI in co-operation with TIFAC/CSIR MARKETING NATIONAL MANUFACTURING COMPETITIVENESS PROGRAMME - COMPONENTS Full Name of the Scheme Short Name

4 NMCP – New Activities (Over next 4 years) No Name of the Component 4 years GOI Share (BE) Total Project Cost GOI Share 1 BAR CODE INCUBATORS QMS / QTT IPR LEAN MTR ICTOpt. I * Opt. II TECH UP DESIGN MARKETING TOTAL * Option I is kept on hold with TPC Rs cr, GOI Share Rs cr and BE Rs cr. Rs. Crore

5 STATUS OF NMCP SCHEMES S. No. Name of Scheme (Cost of Scheme / Rs Cr.) EFCClearanceRE BE i Bar Coding (1. 5) Operational from 01/6/ ii Incubators (79.45) iii QMS / QTT (50) iv IPR (55) v Lean (280.80) vi MTR (210) vii ICT (100) viii TECH UP (93.50) ix Design (50) x C Watch (53) Total Rs. in Crore

6 Barcodes are computerised parallel bars/spaces affixed to products, representing details (size, price, colour, etc.) that are digitally scanned Barcodes are computerised parallel bars/spaces affixed to products, representing details (size, price, colour, etc.) that are digitally scanned Total Project cost – Rs cr Total Project cost – Rs cr  GOI Share – Rs cr  BE – Rs cr All Approvals Obtained. Scheme under Implementation All Approvals Obtained. Scheme under Implementation  – 39 units assisted / Rs. 8 lakh Of Rs. 150 lakh, Rs lakh for Sensitization Progs. and Publicity Of Rs. 150 lakh, Rs lakh for Sensitization Progs. and Publicity 1. BAR CODE 1 / 2

7 Existing MDA Scheme modified to popularize Bar Coding Existing MDA Scheme modified to popularize Bar Coding Bar Coding an effective Tool to improve marketability Bar Coding an effective Tool to improve marketability Reimbursement allowed : Reimbursement allowed :  One Time Registration Fee  75% of Annual Fee for 1 st 3 years (Bar Code Certificate) 1400 SMEs to be Benefitted during 11th FY Plan 1400 SMEs to be Benefitted during 11th FY Plan Need to Ramp-up Scheme in the Context of Retail Revolution / Exports Need to Ramp-up Scheme in the Context of Retail Revolution / Exports 1. BAR CODE 2 / 2

8 Object : Object :  Assist Incubation of Innovative Ideas  Encourage Ideas to Become SMEs Total Project cost – Rs cr Total Project cost – Rs cr  GOI Share – Rs cr  BE – Rs cr FM’s Approval Awaited FM’s Approval Awaited  Requests for Proposals (RFP) Drafted  Contacting Started Rs. 80 cr Project for 100 Business Incubators (BIs) Rs. 80 cr Project for 100 Business Incubators (BIs) 2. INCUBATORS (E & MD) 1 / 2

9 100 BIs to be Located in R&D 25 p.a 100 BIs to be Located in R&D 25 p.a Govt. Grant (Max. 85%) = Rs. 4 to 8 lakhs per Idea Govt. Grant (Max. 85%) = Rs. 4 to 8 lakhs per Idea Each BI to Assist 10 Ideas / Units Each BI to Assist 10 Ideas / Units R&D Institutions and BIs to Suggest & Nurture R&D Institutions and BIs to Suggest & Nurture Can also be Dovetailed with other Schemes Can also be Dovetailed with other Schemes MSME / SIDBI to Tie Up ‘Successes’ with VC / Angel Funds MSME / SIDBI to Tie Up ‘Successes’ with VC / Angel Funds 2. INCUBATORS (E & MD) 2 / 2

10 MSME’s ISO Reimbursement Scheme Successful MSME’s ISO Reimbursement Scheme Successful QMS: ISO (Food), ISO (Health) etc. QMS: ISO (Food), ISO (Health) etc. QTT: Introduce proven Tools like 6-Sigma, 5-S, Kaizen, TPM, TQM etc. QTT: Introduce proven Tools like 6-Sigma, 5-S, Kaizen, TPM, TQM etc. Total Project cost – Rs cr Total Project cost – Rs cr  GOI Share – Rs cr  BE – Rs cr EFC has Cleared. File with Minister for Approval EFC has Cleared. File with Minister for Approval 3. QUALITY MGT. SYSTEMS / TOOLS ( QMS / QTT ) 1 / 3

11 5 Activities to Further Propagate Quality Mgt: 5 Activities to Further Propagate Quality Mgt: 1) Compulsory Courses in ITIs / Polytechnics  QCI/NPC to prepare Course Curricula  1800 ITIs / Rs cr p.a = Rs. 17 cr 2) Assist International Study Missions  For Detailed Study of Best QM Institutions  2 missions / Rs. 1 cr p.a = Rs. 4 cr 3) Special Programmes for Threatened Products  Detailed Analysis of Selected Imports  Leading to Improved Indian Products  2 Sectors / Rs. 0.6 cr p.a = Rs. 4 cr 3. QUALITY MGT. SYSTEMS / TOOLS ( QMS / QTT ) 2 / 3

12 4) Implement Quality Mgt Techniques in Clusters  400 Units (in Clusters) to be Studied for QM  Relevant QMS/QTT to be implemented  100 Units / Rs. 2.5 cr p.a = Rs. 10 cr 5) QM Awareness Programmes among MSMEs  400 Programmes in 4 years in Selected Areas  2 Levels of QM Awareness, i.e. Middle Mgt. & Shop Floor  100 nos. Rs lakh x 4 years = Rs. 5 cr 3. QUALITY MGT. SYSTEMS / TOOLS ( QMS / QTT ) 3 / 3

13 IPR Tools  Trade Secret  Indl. Design  G.I. IPR Tools  Trade Secret  Indl. Design  G.I.  Patents  Copyrights  Trademark  Patents  Copyrights  Trademark Most MSMEs unaware of IPR Benefits / Norms Most MSMEs unaware of IPR Benefits / Norms Total Project cost – Rs cr. Total Project cost – Rs cr.  GOI Share – Rs cr.  BE – Rs cr. EFC has Cleared. Details Thrashed with Stakeholders EFC has Cleared. Details Thrashed with Stakeholders  Guidelines under Submission to Minister  7 Focussed MSME Programmes will be on :  7 Focussed MSME Programmes will be on : 1) 150 Awareness & Sensitization Programmes  Rs. 1 lakh per Programme, by Assn etc. = Rs. 1.5 cr. 4. IPR CAMPAIGN 1 / 3

14 2) 30 Pilot Studies with Associations and Clusters  Rs. 2.5 lakh per study for Diagnosis / Actions = Rs cr 3) 50 Interactive Seminars / Workshops  To Discuss Study Reports and Implementation Rs. 2 lakh = Rs. 1 cr. 4) Short / Long Term Training of IPR Cadre for MSMEs  50 ST (2-3 weeks) and 10 LT (6 months) Rs. 6 lakh (ST) and Rs. 45 lakh (LT) = Rs. 7.5 cr. 5) 40 IP Facilitation Centres by SPV on PPP  For Handholding SMEs in IPR, on Low Fees Rs. 65 lakh = Rs. 26 cr. 4. IPR CAMPAIGN 2 / 3

15 6) Financial Assistance for Patents and GIs (Rs. 10 cr.)  Rs. 25,000 for Domestic, Rs. 2 lakh for Int’l  GI Regn. – Rs. 1 lakh per case 7) Activities with International Agencies (Rs. 2 cr.)  Best Practices, Capacity Building, Exchanges  25 nos. Rs. 5 lakh / 10 Rs. 7.5 lakh 8) Miscellaneous and Contingency (Rs cr) 4. IPR CAMPAIGN 3 / 3

16 Introduced by Toyota, successful for Large & Medium Introduced by Toyota, successful for Large & Medium Lean Manufacturing (LM) is Production of Goods using less of all Inputs compared to Traditional Mass Production Lean Manufacturing (LM) is Production of Goods using less of all Inputs compared to Traditional Mass Production SMEs either Ignorant or Deterred by High Costs SMEs either Ignorant or Deterred by High Costs This, Flagship Scheme of NMCP This, Flagship Scheme of NMCP Total Project cost – Rs cr. Total Project cost – Rs cr.  GOI Share – Rs cr.  Rs. 224 cr. for 700 Mini Clusters (80% by GoI)  Rs. 2 cr. Admn./Monitoring  Rs. 4 cr. For Awareness/ Publicity  BE – Rs cr. EFC is Cleared. Cabinet Note for FM’s Approval EFC is Cleared. Cabinet Note for FM’s Approval  QCI Identifying Consultants / Target Groups 5. LEAN MANUFACTURING 1 / 2

17 LMP to Cover 7,000 to 10,000 units in 4 years LMP to Cover 7,000 to 10,000 units in 4 years Thru Mini 10 units per LM Consultant Thru Mini 10 units per LM Consultant 100 to 300 LM Consultants required p.a. – Expensive 100 to 300 LM Consultants required p.a. – Expensive Govt : Private Funding : 20 (1st Yr), 0 : 100 (2nd Yr) Govt : Private Funding : 20 (1st Yr), 0 : 100 (2nd Yr) Rs. 32 lakh per Mini Cluster Rs. 32 lakh per Mini Cluster  Rs. 24 lakh per Consultant Industry Associations to Execute, thru IAs & SPVs Industry Associations to Execute, thru IAs & SPVs  Lead / Locate / Appoint / Pay / Monitor IAs to be paid Rs. 8 lakh for Project Management Services IAs to be paid Rs. 8 lakh for Project Management Services Industry to Drive & Create Capacities in Private Sector Industry to Drive & Create Capacities in Private Sector EFC has ordered Review/Stop Work after 1 st 100 ! EFC has ordered Review/Stop Work after 1 st 100 ! 5. LEAN MANUFACTURING 2 / 2

18 10 Major Tool Rooms set up - German, Dutch, etc. 10 Major Tool Rooms set up - German, Dutch, etc. They are essential for MSMEs for Tools & Industrial Trng. They are essential for MSMEs for Tools & Industrial Trng. Tooling & Training Needs of MSMEs rising rapidly Tooling & Training Needs of MSMEs rising rapidly  As Govt. Funding is Limited, PPP is Emphasised Total Project cost – Rs cr. Total Project cost – Rs cr.  GOI Share – Rs cr.  BE – Rs cr. EFC and FM have Cleared. CCEA Note with CAB SECT EFC and FM have Cleared. CCEA Note with CAB SECT ILFS appointed Transactional Advisor ILFS appointed Transactional Advisor  To work out PPP Model Details 6. MINI TOOL ROOMS ON PPP MODE 1 / 2

19 MTR cost may range from Rs. 2 cr. to Rs. 25 cr. MTR cost may range from Rs. 2 cr. to Rs. 25 cr.  Govt’s 40% maximum Expected Govt. Funding = Rs. 135 cr. Expected Govt. Funding = Rs. 135 cr.  Total Cost of Projects : Rs. 350 cr. in 4 years To be Managed by Private Partners only To be Managed by Private Partners only Local Industry to gain from Services / Skills Local Industry to gain from Services / Skills Traditional Centre-State Option also open Traditional Centre-State Option also open  GoI - Rs. 9 cr. and State - 6 cr. Another Option Another Option  GoI – Rs. 9 cr. and State + Pvt. (Rs. 6 cr.) 6. MINI TOOL ROOMS ON PPP MODE 2 / 2

20 Low ICT Usage by SMEs – A Cause of Concern Low ICT Usage by SMEs – A Cause of Concern Most ICT Cos. Focusing on SMEs – but Slow Progress Most ICT Cos. Focusing on SMEs – but Slow Progress Intensive Discussions with Stakeholders of Major ICT Cos. Intensive Discussions with Stakeholders of Major ICT Cos. Final EFC Draft being Finalised – Costing being Worked Out Final EFC Draft being Finalised – Costing being Worked Out Total Project cost – Rs cr. Total Project cost – Rs cr.  GOI Share – Rs cr.  BE – Rs cr. Original Project Cost – Rs cr. Original Project Cost – Rs cr.  GOI Share – Rs cr.  BE – Rs. 10 cr. Proposal for PPP / Cost-sharing on Most Activities Proposal for PPP / Cost-sharing on Most Activities 7. PROMOTING ICT IN SMEs 1 / 2

21 Activities under Consideration: Activities under Consideration: 7. PROMOTING ICT IN SMEs No.ActivitiesGoICluster 1 25 Clusters a. Diagnostic Studies a. Diagnostic Studies b. E-Readiness Infrastructure (25 locations) b. E-Readiness Infrastructure (25 locations) c. Web Portals (25) c. Web Portals (25) d. HRD d. HRD e. Training e. Training Sub Total (Rs cr) Association Websites Rs. 8L per Assn for 40 Assn.) E-Catalogue Building & Hosting (10,000 units) SME Networking Portals (PPP) Project Office TOTAL (Rs. 100 cr.) / 2  Hosted Models & Rolling Fund – Under Consideration

22 Total Project cost – Rs cr. Total Project cost – Rs cr.  GOI Share – Rs cr.  BE – Rs cr. Revised EFC Finalised. Under Submission Revised EFC Finalised. Under Submission Focuses on Energy and Certification Focuses on Energy and Certification 6 Activities Proposed: 6 Activities Proposed: 1) Renewable Energy : 5 Demonstration Projects in 4 yrs  UNIDO / GEF Programme on Bio Fuel / Gas  R&D Centre of Excellence at IISC Bangalore  Training / Website / Propagation  Rs. 1 cr. p.a = Rs. 4 cr.  GEF Funding – Rs. 0.8 cr. 8. TECHNOLOGY UPGRADATION 1 / 3

23 2) Implement Energy Audit Advice in 1200 units  Based on PCRA’s Audit of 2000 units (own cost)  Rs. 9 cr. (on 60% Government Aid) p.a. = Rs. 36 cr. 3) Assessment Study & SPV for CDM  To set up 4 SPVs p.a  Rs cr. per SPV = Rs. 2.4 cr. for 16 SPVs 4) Awareness Progs. For CER/CDM (Carbon Credits)  150 Progs. Rs. 33,000 each = Rs. 2 cr. (4 yrs)  May revise CDM Intervention, if successful 8. TECHNOLOGY UPGRADATION 2 / 3

24 5) Voluntary Product Cert. Reimbursement (Rs cr.)  800 Units/Licences (ISI Mark) p.a  Rs. 1 lakh (max.) per Unit/Licence = Rs cr. (4 yrs)  325 Units/Licences for Int’l Cert. for CE, ANSI etc. p.a  Rs. 2 lakh (max.) per Unit/Licence = Rs cr. (4 yrs) 6) Continuous Appraisal & Miscellaneous (Rs. 2.0 cr.)  For Mid-Course Changes  Outsourcing / Hiring Experts etc. 8. TECHNOLOGY UPGRADATION 3 / 3

25 Designs make SME Products Competitive Designs make SME Products Competitive  Ballpoint Pens, Tooth-brushes, etc. Design Input Essential for Survival of MSMEs Design Input Essential for Survival of MSMEs Cluster-based Design “Clinics” Proposed Cluster-based Design “Clinics” Proposed  Suggestions / Specific Packages Required  Need to Work Out Cost and Sharing Formula Previous Proposal mainly Governmental Previous Proposal mainly Governmental  One National Centre with NID  6 Regional Centres and 225 Design Clinics 9. DESIGN CLINICS / SUPPORT 1 / 2

26 Total Project cost – Rs cr. Total Project cost – Rs cr.  GOI Share – Rs cr.  BE – Rs cr. Scheme held up due to lack of Specificities Scheme held up due to lack of Specificities  Discussions with FICCI, CII etc. on DPR has been Insisted.  Bids called. DPR has been Insisted.  Bids called.  Thereafter, EFC and CCEA to follow  3 months target 9. DESIGN CLINICS / SUPPORT 2 / 2

27 To Survive competition, Indian MSMEs need To Survive competition, Indian MSMEs need  Modern Packaging & Marketing Techniques  To Technically Study Competitors’ Products and Counter-respond NER Requires integration in Mainstream Markets NER Requires integration in Mainstream Markets  Wide Ranging exposure to be Encouraged Total Project cost – Rs cr. Total Project cost – Rs cr.  GOI Share – Rs cr.  BE – Rs cr.  Preparing Revised EFC by 15th April 10. MARKET ASSISTANCE & TECH. UPGRADATION (MARKETING) 1 / 3

28 Activities Proposed (Still under Preparation): Activities Proposed (Still under Preparation): 1) Tech. Upgradation in Packaging with IIP, NID, IITs  Exposure to Best Technologies  Cluster-based Studies for Status/Actions  Unit-based Interventions on Cost Sharing 2) Study Competition for Self-improvement  Exposure to Competitors’ Products in India & Abroad  Detailed study of specific ‘Defeats’, with reasons  Enterprise-led Improvement Programmes 10. MARKET ASSISTANCE & TECH. UPGRADATION (MARKETING) 2 / 3

29 3) Modern Management Techniques Adoption  Basically Skill Development in Latest Technologies 4) NER Exposure and Marketing Assistance  Connect NER Entrepreneurs to Mainstream  Through Subsidised Exposure Visits to India’s best  Participation in National Fairs, Study Missions and Workshops 10. MARKET ASSISTANCE & TECH. UPGRADATION (MARKETING) 3 / 3

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