Govt priority to keep MSMEs strong
Chief of Defence Staff General Bipin Rawat has told MSMEs to help India build its own defence industry, and work to be listed among the top 10 nations in defence technologies.
He cited example of the United States industry which developed indigenous industry within a short-span of two years after the World War II.
The General joined Defence Minister Rajnath Singh in a video conference MSMEs E-conclave, jointly organised by SIDM, Confederation of Indian Industry (CII) and Department of Defence Production on 21 May 2020 in Delhi.
Minister Singh further assured MSME of the Government support, saying it was a priority to keep the sector strong.
“There are more than 8,000 MSMEs, tiered partners of many of our organisations – Ordnance factories, DPSUs and service organisations. They contribute more than 20% of the total production of these organisations,” he underlined the importance of industry.
MSMEs are backbone of Indian economy that accelerate GDP growth and earn valuable foreign exchange through exports, generating employment opportunities, Singh pointed out.
But the Minister acknowledged hardships faced by the defence industry.
“Manufacturing sector has been affected the most due to lockdown and disruption in existing supply chains and the defence sector is no exception to this,” he noted.
“Rather, it can be said that the defence sector is more aggravated than other sectors as the only buyer of defence products is the government.”
The SIDM has interacted with senior defence officials and the Armed Forces since the lockdown came into force, and gathered feedback.
To tackle these challenges, the Defence Ministry has taken several steps for industries, especially MSMEs.
These are extension of response dates of RFP/RFI, early clearance of pending payments, etc.
The Government’s financial support measures for defence sector are expected to provide some relief by making available working capital and deferment in interest payments among others.
The Rs.3 lakh crore Collateral free loan for MSMEs will be effective in re-establishing about 45 lakh units and saving employment, he pointed out.
Among others, subordinate debt provision of Rs.20,000 crore has been announced for the 200,000 stressed MSMEs while Rs.50,000 crore ‘Mother-Daughter Fund’ is for the needy MSMEs.
Further, the Rs.10,000 crore ‘Fund of Funds’ will help increase the marketing capacities of these MSMEs, definition of which have been expanded while there will be no distinction between manufacturing and services sector MSMEs.
To help MSMEs grow business, the Government has set limit on global tenders above Rs.200 crore each.
Government and PSUs will also ensure the clearance of all outstanding payments in the next 45 days.
More than 800 defence MSMEs participated in the E-conclave ‘Business Continuity for MSMEs in Defence & Aerospace Sector’.
Secretary (Defence Production) Raj Kumar cited the recent reforms to help realise the target of achieving a US$25 billion defence production by 2025. fiinews.com
