- In Business
- MSMEs seek improvements in basic Infra, EoDB to make Goa attractive
MSMEs seek improvements in basic Infra, EoDB to make Goa attractive
Goa, though a small State, has not performed too well in Ease of Doing Business. Efforts are on to ensure compliance on Business Reform Action Plan score is higher. VIKANT SAHAY takes a look at how Goa can work on helping the Micro, Small and Medium Enterprises (MSME) sector and subsequently create more jobs in the State
The industry in general and Micro, Small and Medium Enterprises (MSME) in particular, normally require five parameters for sustenance. These are land, power, Ease of Doing Business (EoDB), incentives and encouragement.
About 95% of the total MSME segment, where the total annual turnover is less than Rs 50 crore, creates 85 per cent jobs of the total industrial workforce in India. Also, they the largest employment generators and around 40 per cent of our total exports come from the MSME segment. This is a nursery of entrepreneurs which later on take shape of big industries. Goa too is dependent on virtually 98 per cent MSME sector, barring very few like Zuari Chemicals, MRF and Deccan Chemicals. There are hardly any large enterprises in Goa. However, many of the MSME sectors in Goa have grown on their own without much help from the State government.
Given the fact that Goa being a small state and having very scarce land resources, the Goa government had recently taken a decision to reduce the open space from 15 per cent to 7.5 per cent which was welcomed by the industry as there was an increase in land availability for the industries to build upon and expand.
However, the industry does have a complaint that only surveys are being done to identify those extra spaces.
“Till now the land should have actually been divided it into plots so that people or the entrepreneurs could use them. At the policy level the things have been taken care off but at the implementation level the last mile connectivity is lacking. This needs immediate attention of the government so that some relief could be given to the MSME sector,” said Rajkumar Kamat, President of Goa State Industries Association.
As far as power is concerned, the cost of power in Goa is one of the lowest in the country. “However, the issue is the quality of power needs more attention. I am also finding that under the new Power Minister Nilesh Cabral lot of actions are being taken in time bound manner. I was pleasantly surprised to see that he was aware of every problem in the power sector and has a solution for that. Intentions are good but the actions and implementation need to be taken so that industries do not lose out on time, production and manpower,” added Kamat.
Ease of Doing Business in Goa had not been easy. However, with direct intervention of Chief Minister Manohar Parrikar from poor 18 per cent compliance of BRAPs it has gone up to nearly 60 per cent. BRAP scores are largely driven by the IT and technology advances made by the government.
“However, 18-60 per cent jump in compliance is the easy part but the challenge is to raise the bar to 90 per cent and here is where serious action and coordination is needed and I see a consistent movement towards achieving the target by the Industry Department of Goa,” added the President of GSIA. A meeting is also scheduled among all the departments of the government in January first week to review the progress.
Industry in Goa, are demanding that the Factories and Boilers Act needs to be revisited. “The laws are old and archaic and review of these laws needs to be done as there is an involvement of State and Center in this area. In the EoDB it is being converted into non-personal interface mode but the Act and rules need to revisited and this will help the small and medium scale industries a lot,” added Kamat.
Giving example of automobile manufacturing industry in Chennai, the President of the Goa Chambers of Commerce and Industries, Sandip Bhandare said, “Most of these large industries are dependent on small ancillary units, primarily MSMEs for several small machines, including spare parts. We also require such kind of an ecosystem. For example ACGL in Goa has helped many MSMEs to sprout and flourish in the State. Secondly, EoDB and availability of logistics has to be done for the benefit of the industry.”
When asked whether the MSME can play a major role on creation of jobs in Goa, Bhandare said, “the possibility of creation of jobs in the MSME sector is much higher than in the large scale industries which would normally require specialists. However, both the large and small and medium scale industries compliment each other for a better ecosystem for job opportunities. If we have only large and MSME sectors in isolation then the possibilities of job creations will be much lesser.”
Bhandare further added that there for MSME to flourish in Goa, smaller land parcels, power and raw water at a cheaper rate are required. “On January 3 we are having a meeting on EoDB with IPB and we will get to know which department will require more help to go online. This will help the entrepreneurs a lot and doing business will be much easier, especially for the MSME sector. At GCCI we all are working hard to ensure that Goa steps up in EoDB ranking so that industries flourish in the State.”
Goa had nearly 183 MSMEs and the number has dwindled to 140. “Things are not very rosy in Goa. We have recently seen what happened with the fishing industry. Small and micro industries are dependent on large and medium industries as for large industries MSME plays a role of ancillary unit. If big industry closes down smaller units fumble. Marico from Khandepar at Ponda for example, which manufactured coconut oil and was doing well, but raw material sourcing from Cochin in Kerala and logistics problem added to the cost of production and they had to close down. It led to loss of employment and revenue,” said the chairman of the National MSME Council, Manguirish Pai Raiker.
He added that professionalism in Goa was lacking and lot of training is required. “Goa does not have technology centers, tool rooms, training centers and quality analytical centers. All these are a must for smooth functioning of the MSME sector. If MSME sector is neglected, Make in India and job growth will still look like a distant dream. Also, unfortunately the data has also not been recorded properly. However, now with the up-gradation of technology data is now being recorded,” warned Manguirish Pai Raiker.