2.61 crore MSMEs in 2006-2007 – reveals the 4th census of Micro, Small and Medium Enterprises
(Press Information Bureau) The Quick results of 4th All India Census of MSMEs (2006-07) have become available. The results reveal that there are a total number of 2.61 crore MSMEs in 2006-07 (as against the current projected figure of 1.3 crore). This includes 0.15 crore registered units and 2.46 crore un-registered units. Of the total, 28% are in manufacturing and 72% in services. These units are largely in Apparel (14.03 %) followed by Food Products and Beverages (13.53%) and Maintenance of Personal and Household goods (9.25%). The MSME sector accounts for employment of 5.97 crore persons, of which, 0.95 crore are in registered units and 5.03 crore in the un-registered units. The Data on registered units reveals that closure among MSMEs has decreased from the 39% in 2001-02 to 21.64% in 2006-07. Sickness in MSMEs has increased marginally from 13.98% in 2001-02 to 14.47% in 2006-07. Sickness is found to be largely on account of lack of demand and shortage of working capital. The data also reveals that the per unit employment has increased from 4.48 in 2001-02 to 6.24 in 2006-07, per unit fixed investment from Rs.6.68 lakh to Rs.33.78 lakh and per unit gross output from Rs.14.78 lakh to Rs.46.13 lakh in order of priority. Once the survey of unregistered units is completed, information will become available in respect of gross output, investment, outstanding loans, sickness, exports, etc. This data will also include information on KVIC and Coir units. This is the first Census after change in definition of the sector and includes, for the first time, medium enterprises and services. For purposes of the Census, an enterprise is defined as a unit with fixed premises and hence does not include hawkers, road side vendors, etc. The 3rd All-India Census of Small Scale Industries with reference year 2001-02 was completed in the year 2003. The 4th All-India Census of MSMEs was launched in May 2008 and its field work was completed in March 2009. This required collection of data for 24 lakh registered units and around 4 lakh unregistered units. The Census was done in cooperation with the State/UT Governments. Statistics pertaining to the sector play an important role for policy formulation on credit, marketing, technology, entrepreneur development and infrastructure development. The findings of the Census will have utility for planners, administrators, academicians, industrialists, entrepreneurs and all other stakeholders in the promotion and development of MSMEs. The quick results are based on a census of all registered units conducted by the Office of DC (MSME) and Economic Census of un-registered units conducted by Central Statistical Organisation. The Sample Survey of unregistered units by the Office of DC (MSME) is under way and is expected to be completed shortly. This will provide complete information on the MSME sector.
Sunday 6 September 2009
MSME
FDI cap redefined for 26 million MSMEs employing 60 million
Government of India
Ministry of Commerce & Industry
Department of Industrial Policy & Promotion
(FC Section)
Press Note No.6 (2009)
Subject: Foreign Direct Investment (FDI) into a Small Scale Industrial
Undertaking (SSI)/ Micro & Small Enterprises (MSE) and in Industrial
Undertaking manufacturing items reserved for SSII MSE - clarification.
1.0 FDI into SSIIMSE
1.1 A Small Scale industrial undertaking (SSI) was defined in terms of: (i) investment in
fixed assets in plant and machinery and (ii) equity participation (both domestic and foreign) in the SSI, by other industrial undertakings prior to 2006.
1.2 Vide Press Note 18 (1997), it was further notified that, for cases of foreign
collaborations, since the maximum equity participation allowed for in small scale units was 24%, proposals for induction of foreign equity more than 24% would be subject to the condition that: (i) the company would get itself de-registered as a small scale unit and (ii) obtain industrial licence or file Industrial Entrepreneur Memorandum with SIA, as per prescribed policy and procedure.
1.3 With the promulgation of the Micro, Small and Medium Enterprises Development
(MSMED) Act, 2006, the ceiling for equity participation (both domestic and foreign) in the
micro and small enterprises, by other enterprises, was removed and Micro and Small
Enterprises (MSE) (earlier small scale industries) were defined solely on the basis of
investment in plant & machinery (for micro and small enterprise engaged in manufacturing) and equipment (for micro and small enterprise engaged in providing or rendering of services). Accordingly, this change was notified by Notification No. S.O. 563(E) dated 27th February 2009 of Department of Industrial Policy & Promotion, Ministry of Commerce & Industry.
1.4 Thus the present policy on FDI in MSE permits FDI subject only to the sectoral
equity caps, entry routes and other relevant sectoral regulations.1.5 Press Note 18 (1997 series) stands modified to the above extent.
2.0 FDI in Industrial Undertaking manufacturing items reserved for SSIIMSE
2.1 Vide Press Note 14 (1997), it was notified that Industrial Undertakings manufacturing items reserved for small scale sector were not eligible for automatic approval for induction of foreign investment.
2.2 Accordingly, the FDI policy notified vide Press Note 2 (2000) prescribed prior approval of Government where foreign investment was more than 24% in the equity capital of units manufacturing items reserved for small scale industries. This was reiterated in the Annex to Press Note 4 (2006) and at Para III (ii) of Annex to Press Note 7 (2008).
2.3 Thus, any industrial undertaking, with or without FDI, which is not a MSE, manufacturing items reserved for manufacture in the MSE sector (presently 21 items) as per the Industrial Policy, would require an Industrial License under the Industries (Development & Regulation) Act, 1951, for such manufacture. The issue of the Industrial Licence will be subject to a few general conditions and the specific condition that the undertaking shall undertake to 'export a minimum of 50% of the new or additional annual production of the MSE reserved items to be achieved within a maximum period of three years. The export obligation would be applicable from the date of commencement of commercial production'. Such an industrial undertaking would also require prior approval of the Government (FIPB) where foreign investment is more than 24% in the equity capital.
Signed by/-
Joint Secretary to the Government of IndiaF. No. 5(10)/2009-FC Dated 04/09/2009
Government of India
Ministry of Commerce & Industry
Department of Industrial Policy & Promotion
(FC Section)
Press Note No.6 (2009)
Subject: Foreign Direct Investment (FDI) into a Small Scale Industrial
Undertaking (SSI)/ Micro & Small Enterprises (MSE) and in Industrial
Undertaking manufacturing items reserved for SSII MSE - clarification.
1.0 FDI into SSIIMSE
1.1 A Small Scale industrial undertaking (SSI) was defined in terms of: (i) investment in
fixed assets in plant and machinery and (ii) equity participation (both domestic and foreign) in the SSI, by other industrial undertakings prior to 2006.
1.2 Vide Press Note 18 (1997), it was further notified that, for cases of foreign
collaborations, since the maximum equity participation allowed for in small scale units was 24%, proposals for induction of foreign equity more than 24% would be subject to the condition that: (i) the company would get itself de-registered as a small scale unit and (ii) obtain industrial licence or file Industrial Entrepreneur Memorandum with SIA, as per prescribed policy and procedure.
1.3 With the promulgation of the Micro, Small and Medium Enterprises Development
(MSMED) Act, 2006, the ceiling for equity participation (both domestic and foreign) in the
micro and small enterprises, by other enterprises, was removed and Micro and Small
Enterprises (MSE) (earlier small scale industries) were defined solely on the basis of
investment in plant & machinery (for micro and small enterprise engaged in manufacturing) and equipment (for micro and small enterprise engaged in providing or rendering of services). Accordingly, this change was notified by Notification No. S.O. 563(E) dated 27th February 2009 of Department of Industrial Policy & Promotion, Ministry of Commerce & Industry.
1.4 Thus the present policy on FDI in MSE permits FDI subject only to the sectoral
equity caps, entry routes and other relevant sectoral regulations.1.5 Press Note 18 (1997 series) stands modified to the above extent.
2.0 FDI in Industrial Undertaking manufacturing items reserved for SSIIMSE
2.1 Vide Press Note 14 (1997), it was notified that Industrial Undertakings manufacturing items reserved for small scale sector were not eligible for automatic approval for induction of foreign investment.
2.2 Accordingly, the FDI policy notified vide Press Note 2 (2000) prescribed prior approval of Government where foreign investment was more than 24% in the equity capital of units manufacturing items reserved for small scale industries. This was reiterated in the Annex to Press Note 4 (2006) and at Para III (ii) of Annex to Press Note 7 (2008).
2.3 Thus, any industrial undertaking, with or without FDI, which is not a MSE, manufacturing items reserved for manufacture in the MSE sector (presently 21 items) as per the Industrial Policy, would require an Industrial License under the Industries (Development & Regulation) Act, 1951, for such manufacture. The issue of the Industrial Licence will be subject to a few general conditions and the specific condition that the undertaking shall undertake to 'export a minimum of 50% of the new or additional annual production of the MSE reserved items to be achieved within a maximum period of three years. The export obligation would be applicable from the date of commencement of commercial production'. Such an industrial undertaking would also require prior approval of the Government (FIPB) where foreign investment is more than 24% in the equity capital.
Signed by/-
Joint Secretary to the Government of IndiaF. No. 5(10)/2009-FC Dated 04/09/2009
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