According to the Ministry of MSMEs, the Government of India has decided to allocate Rs.2500 crore technology upgradation fund for MSME sector. This fund will be created next year when the 12th Five-Year plan starts. This fund will help the India’s Micro, Small and Medium enterprises acquire new technology and upgrade the existing technology.
Bringing new technology is a costly proposition for the MSME sector. In order to find a solution to this problem, the ministry of MSMEs is planning to import the new technology and then offer it to MSMEs at subsidized rates. New fund for technology upgradation will be helpful for the entire MSME sector, having various verticals like foundry, light engineering etc. About 26 million MSMEs are present in India, which contribute highly in Indian economy growth. This sector accounts for 45% of manufacturing output.
Coming to the cluster development programme, the Government of India has decided not to run common facility centers including lab or machinery etc. for MSMEs. There are over 350 clusters in various industry verticals in India, which used to get financial aid for setting up common facility centers and industrial infrastructure development. But now, the government has said that the special purpose vehicles formed by about 20-30 industrial units will run them and whatever surplus they have they will share it, the government will only facilitate cluster development programmes.
To make MSME sector more competitive, the ministry is also planning to give fiscal incentives in the upcoming Manufacturing Policy.