WATCH MSME WATCH

PEOPLE

ENTERPRISES

OF MANUFACTURING OUTPUT

OF TOTAL EXPORTS

While the Public Sector Undertakings fuel the Core of Indian Economy, the incredulously large number of Micro, Small and Medium Enterprises constitute the seamless source of employment for crores of Indians. These MSMEs can do wonders if the vast engineering talent pool of the country can be channelized to enhance their value propositions and thereby their competitive edge by pitching in with their know-how. This would need a major perception shift by building in a sense of a purpose & trust in the promise and potential of MSMEs for national development. This would also resolve the spectre of employing the over 10 lakh strong workforce of engineers coming out of colleges every year. This section would explore some of the most fascinating aspects of MSMEs from an engineers’ perspective.

-Editor

Piyush Srivastava is best known for his work for the small and medium enterprises. For last 6 years Piyush is reporting the development and challenges of MSME sector. An alumnus of London School of Economics, Piyush Srivastava is currently working as a news anchor and special correspondent with Zee Business. In his 6 years of experience in journalism Piyush realized the potential of Small & Medium enterprises. He feels that this sector is the real back bone of India’s economy and it’s

MSME Sector is theMSME Sector is the

of the total industrial output, of the total industrial output, and more than 40% and more than 40%

of direct exportof direct export

45%45%

”

Piyush SrivastavaPiyush SrivastavaSpecial Correspondent, Zee Business

87

www.facebook.com/engineeringwatchwww.twitter.com/enggwatch

Piyush Srivastava is best known for his work for the small and medium enterprises. For last 6 years Piyush is reporting the development and challenges of MSME sector. An alumnus of London School of Economics, Piyush Srivastava is currently working as a news anchor and special correspondent with Zee Business. In his 6 years of experience in journalism Piyush realized the potential of Small & Medium enterprises. He feels that this sector is the real back bone of India’s economy and it’s

MSME Sector is theMSME Sector is the2nd largest employer. 2nd largest employer. which contributes more than which contributes more than

of the total industrial output, of the total industrial output, and more than 40% and more than 40%

45%45%““

engineers can fill this gap. Government is trying its best to promote the manufacturing and the young engineers need to take advantage of the government schemes such as Credit Guarantee Scheme where banks provide a loan up to 1Cr without any collateral or security to the first generation entrepreneurs.

What’s new in the third season of Zee Emerging Business Forum? How can the various engineering colleges leverage from this forum?The 3rd season of Emerging Business Forum will focus on detailed solution of specific problems of entrepreneurs. At this point, I can’t share much detail but this year I am trying to make it the biggest SME forum of India. There will be a lot of take away for the budding entrepreneurs. What makes you so passionate about the SME sector? What more is on the cards for this emerging sector?This sector is the 2nd largest employer. This is the sector, which contributes more than 45% of the total industrial output, more than 40% of direct export. These facts make me passionate for this sector. But we need better policy frame work and much better infrastructure to boost the moral of this sector. I strongly believe that only this sector can make India a developed Nation.

Tell us more about Zee Emerging Business Forum? What has been its impact/influence on the SME sector?Emerging Business Forum is an on ground and on air TV series that provides a unique setting for engagement and exchange of ideas, and enables SME clusters to imbibe quality management processes and innovation for business growth. It is a platform where SMEs absorb success stories, best practices, and get mentoring by eminent entrepreneurs. You would be anchoring the Zee Emerging Business Forum’s third edition this year? What has been your experience with the SME leaders year on year? From these interactions of yours, what future do you see for SMEs?In last 2 years I’ve met more than 15,000 entrepreneurs across countries and it was an amazing experience. There were many entrepreneurs who touched my heart, I am deeply moved by their spirit of entrepreneurship. After meeting all these successful entrepreneurs, I have realized that money is never the obstacle to start a business. It’s the willpower which matters and not the resources. As of now the best example of spirit of entrepreneurship, I have seen in Tirupur. Where more than 80% of the 1st generation entrepreneurs never been to school but today they export Rs.20,000 Cr worth of knitwear products.

India has got an installed capacity of producing around 14.54 engineers every year? This poses a great challenge for their due employment? What kind of career avenues can SMEs offer to this vast talent pool of engineering graduates?I have no doubt that this sector is the backbone of our economy and the future belongs to this sector. We need a country of billion entrepreneurs. There is a huge potential for all the budding engineers. We can only become a developed nation when we increase share of manufacturing sector in our GDP, which is currently just a little above 15%. With the downfall in the manufacturing sector now there is a huge gap in demand and supply, we can’t afford to become the Euro Zone. The western economies are falling due to major decline in the manufacturing sector. Therefore, the budding

86

www.engineeringwatch.in

I strongly believe that only the MSME sector can make India a developed Nation

MSME ENGINEERING

CLUSTERS IN INDIA

Andhra PradeshHyderabadBalanagar

BiharBarauni

ChattisgarhRaipur

DelhiOkhlaNarainaMayapuri

GujaratAhmedabadRajkotBhavnagarSurat

HaryanaKarnalFaridabadGurgaonPinjoreSamalkhaRohtakAmbala

Himachal PradeshParwanoo

Jammu & KashmirJammu

JharkhandAdityapurBokaroJamshedpur

KarnatakaDharwadBangaloreBelgaum

Madhya PradeshPithampurDewasBhopal

MaharashtraJalgaonAhmednagarAurangabadGadchiroliSindhudurgMumbaiPuneJalnaKolhapurNagpurSangli

OrissaCuttack

PunjabJalandharPatialaLudhianaBatalaMandi Govindgarh

RajasthanJaipurNagaur

Tamil NaduCoimbatoreChennaiTiruchirappalli

Uttar PradeshVaranasiNoidaAgraGhaziabadHathras

UttaranchalRoorkee

West BengalHowrahJhalda ProperTaltalaKalyanpur

ORISSA(ODISHA)ORISSA

(ODISHA)

JHARKHANDJHARKHAND

WESTBENGAL

WESTBENGAL

BIHARBIHAR

SIKKIMSIKKIM

ASSAM(ASOM)ASSAM(ASOM)

MEGHALAYAMEGHALAYA

TRIPURATRIPURA

NAGALANDNAGALAND

MIZORAMMIZORAM

ARUNACHALPRADESH

ARUNACHALPRADESH

MANIPURMANIPUR

YANAM (PUDUCHERRY)YANAM (PUDUCHERRY)

VARANASIVARANASI

KalyanpurKalyanpur

HOWRAHHOWRAHTaltalaTaltala

Jhalda ProperJhalda Proper

JamshedpurJamshedpur

BOKAROBOKARO

CUTTACKCUTTACK

AdityapurAdityapur

BARAUNIBARAUNI

WATCH MSME WATCH

Agricultural Implements

Agricultural Implements & Tractor Trailer

Auto Components

Ball Bearing

Bicycle Parts

Castings & Forging

Castings & Metal Fabrication

Copper Coated Wires

Cutting Tools

Electric Motors

Electrical Equipments

Electrical Goods

Electronic Goods

Engineering & Fabrication

Engineering Equipment

Forging

Foundry

Hand Pumpsets

Handtools

Industrial Fasteners

Light Engineering

M S Rods

Machine Tools

Mechanical Engineering Equipment

Metal Fabrication

Nuts/Bolts

Oil Mills Machinery

Scientific Instruments

Sheetwork (Globe, Lamp)

Steel Re-rolling

Surgical Instruments

Survey Instruments

Textile Machinery

Textile Machinery Parts

Wet Grinding Machines

KOLHAPURKOLHAPUR

JHARKHANDJHARKHAND

MADHYA PRADESHMADHYA PRADESH

RAJASTHANRAJASTHAN

UTTAR PRADESHUTTAR PRADESH

HARYANAHARYANA

CHENNAICHENNAI

KACHCHHKACHCHH

JAMMUJAMMU

POKPOK

JAMMU AND KASHMIRJAMMU AND KASHMIR

UTTARAKHANDUTTARAKHAND

GUJARATGUJARAT

YANAM (PUDUCHERRY)YANAM (PUDUCHERRY)

KERALAKERALA

ANDHRA PRADESHANDHRA

PRADESH

R A N N O F K A C H C H HR A N N O F K A C H C H H

BatalaBatala

RoorkeeRoorkee

JAIPURJAIPURNAGAURNAGAUR AGRAAGRA

HathrasHathras

VARANASIVARANASI

RAIPURRAIPUR

CHHATTISGARHCHHATTISGARH

NAGPURNAGPUR

GADCHIROLIGADCHIROLI

HYDERABADHYDERABAD

TIRUCHCHIRAPPALLITIRUCHCHIRAPPALLI

TAMIL NADUTAMIL NADU

COIMBATORECOIMBATORE

BELGAUMBELGAUM

SANGLISANGLI

KHOLAPURKHOLAPUR

SINDHUDURG

MUMBAIMUMBAI

AURANGABADAURANGABAD

JALNAJALNA

AHMADNAGARAHMADNAGAR

PUNEPUNE

MAHARASHTRAMAHARASHTRA

JALGAONJALGAON

SURATSURAT

BHAVNAGARBHAVNAGAR

AHMEDABADAHMEDABAD

RAJKOTRAJKOTPITHAMPURPITHAMPUR

DEWASDEWAS

BHOPALBHOPAL

KARNALKARNAL

SamalkhaSamalkhaROHTAKROHTAK

GURGAONGURGAON

AMBALAAMBALAPATIALAPATIALA

Mandi GovindgarhMandi Govindgarh

PUNJABPUNJAB

BANGALOREBANGALORE

KARNATAKAKARNATAKA

HIMACHALPRADESHHIMACHALPRADESH

DELHIDELHI

DHARWADDHARWADGOAGOA

ParwanooParwanoo

BALANAGARBALANAGAR

JALANDHARJALANDHAR

LUDHIANALUDHIANA

Engineering Watch | December 2012

As per certain estimates only 2.2 lakh bracket. On the other hand the synergy has become possible engineers get placed in the organized cr i ter ion used by the EU is between SME and employment sector comprising of IT, Telecom, Core employment with all units employing p r o m o t i o n p o l i c i e s , w h i c h Engineering etc. out of the total pool less than 500 workers constituting underscore the critical importance of of 10 lakh engineers graduating every the small business segment. the MSME sector in national year. This vast amount of left-over engineers is eventually absorbed by the mid-cap IT & ITes companies, Start-ups and the humongous MSME sector of India. We thought of seeking the views of none other than the Secretary of the Ministry of Micro Small & Medium Enterprises, Sri Vivek Rae on the prospects of Engineering Graduates in the MSME sector. As per Sri Rae, the MSME sector yields more economic value fo r t h e E u ro p e a n U n i o n i n Notwithstanding the differences in development. The NMP has set an comparison to that of India. This re- the definitions adopted for small objective to achieve a sustained ascertains the sentiment that if India businesses, it is seen that the EU g r o w t h o f 1 2 - 1 4 % o f t h e has to become a developed economy, economy is more dependent on its manufacturing sector while creating it has to channelize the creative SME sector to drive growth than the 100 million additional jobs therein by energies of its graduating energies to Indian economy is on its MSME 2022. empower its vast MSME sector. sector. This is reflected in the fact that

--Editor the share of EU SMEs in total gross To this end the policy contains value added by EU industry is about dedicated interventions for MSMEs 60 % as compared to 40% share of which have been taken up by the

What is the state of MSME sector in Indian SMEs in the country's Ministry of MSME. These include up India vis-a-vis other advanced industrial production. However gradation of technology and greater countries in the world? What Government of India is far more infusion of equity in SMEs, which importance do you accord to it in stretched than its EU counterpart in would enhance growth of the MSME national development? supporting small businesses since as sector and the manufacturing sector

compared to 32 million MSME units at large. Concomitantly, workers The MSME sector in India contributes in India, EU has fewer SME units at would be trained and re-skilled to 8.5-9% of GDP while its share in the about 21 million. make them more employable in small total industrial production and businesses so that the employment exports of the country stands at In spite of fewer SME units, EU SMEs target under the NMP could be about 40% and 45% respectively. employ larger number of workers at realistically pursued. There are about 32 million MSME about 87 million compared to 73 units in India employing about 73 million in the Indian MSME sector. What type of career opportunities is million persons with an aggregate The comparison is somewhat available for engineering graduates fixed investment of above Rs.62 anomalous as the Indian SME in Indian MSMEs? billion. definition precludes all units with

fixed investment above Rs. 10 crore Through the Tool Rooms, MSME A like to like comparison of the Indian from the MSME bracket even if such Sector of India has become one of the MSME sector with those of advanced u n i t s h av e fe w e r t h a n 5 0 0 major providers of employment for economies such as the European employees. If this anomaly were to be technical as well as non-technical Union is difficult to make owing to corrected the Indian SMEs can be manpower. Graduate engineers are differences in the definition adopted shown to be more labour intensive important for the following positions: for small businesses. The Indian than the EU SMEs reflecting the definition uses the criterion of fixed labour abundant feature of the Indian Production Supervisorsinvestment in plant and machinery economy. Since graduate engineers are with manufacturing and service technically sound, they can guide the sector units having a fixed investment Following the announcement of the semi-skilled or non-skilled machine not exceeding Rs. 10 crore and Rs. 5 National Manufacturing Policy (NMP) operators to meet organizational crore respectively falling in the MSME in 2008, a greater convergence and targets.

The EU economy is more dependent on its SME

sector to drive growth than the Indian economy is

on its MSME sector. In spite of fewer SME units, EU

SMEs employ larger number of workers at about

87 million compared to 73 million in the Indian

MSME sector.

December 2012 | Engineering Watch

”

”MSME sector can be used as a stepping stone for young Engineers dreaming big in industries. The experience

obtained in MSME sector can

make the Young Engineers equipped to handle tough

competition in bigger firms.

Vivek Rae Secretary

MSME

opportunities in such units. What are the plans of MSME to make it one of the sought after sectors for

Preference for work experience in employment? large scale industries As of now, recruiters prefer MSME Tool Rooms have been set up engineering graduates working in in different parts of the country. Tool large scale industries as technological Rooms are providing consultancy challenges are perceived to be more services to the MSMEs in the field of in larger units. tool engineering and allied fields to

m a k e t h e m i n t e r n a t i o n a l l y Industry Reputation competitive.Engineering graduates prefer to join larger firms as they find such firms MSME Tool rooms are also giving more reputed than smaller units in consultancy for implementation of the MSME sector. Lean Manufacturing concepts, which

Design Engineers reduces costs and lead times thereby T h e grad u ate en g in eers a re Engineering graduates may be m a k i n g s m a l l e r u n i t s m o r e competent to roll out concepts in reluctant to set up MSME units in competitive. respect of new product design and the i r home towns owing to development. inadequate availability of necessary The products/items manufactured by

infrastructure facilities such as MSMEs are also supported for Marketing Engineers industrial plots, road, power, fiscal priority purchase by Government Since communication skills of incentives, skilled manpower etc. departments. g r a d u a t e e n g i n e e r s a r e comparat ively better than a What governmental support is being What message would you like to give generalist in explaining a product, provided in this respect? What have to budding technocrats towards they can also be utilized for marketing been the definitive outcomes of the opting for a career in MSMEs? jobs. same?

MSME sector can be used as a Techno-commercial Engineers Latest technologies are adopted in stepping stone for young Engineers The engineering background also MSME Tool Rooms set up by Govt. of dreaming big in industries. The helps engineers finalize commercial India so that technically skilled experience obtained in MSME sector contracts, which involve technical manpower is made available to can make the Young Engineers specifications. support the Indian MSMEs. e q u i p p e d t o h a n d l e t o u g h

competition in bigger firms. There are In general the MSME sector acts as a Ministry of MSME is also providing ample opportunities for Engineering nursery for large firms by providing free training to the SC/ST students to Graduates to sharpen their technical trained & experienced technical help the Engineering graduates from as well as commercial skills in the p e r s o n s w i t h f u n d a m e n t a l SC/ST community to get hands on MSME sector.experience of industrial sector. practical training which will enable

them join MSMEs.What holds back the engineering g r a d u a t e s f r o m j o i n i n g o r Entrepreneurship Skill Development establishing MSMEs in their training (ESDP) training programmes respective home towns? are provided to the Engineering

graduates, which, enables them to The main reasons that hold back establish their own MSMEs in their engineering graduates are: respective home towns.

Low Wages Government has also launched Since MSMEs invest comparatively UDYAMI, a help line centre, which smaller amounts in their business a mo n g o t h er t h in gs , gu id es they are not able to pay high wages. prospective entrepreneurs in setting

up a bus iness and prov ides Old Technology information on financing such as MSMEs are slow to adapting newer Credit Guarantee Fund Scheme for technology owing to limitation of MSMEs, which provides them f u n d s a n d t h u s en g in eer in g collateral free loans. graduates do not find ample learning

Engineering Watch | December 2012

78

REASON WHICH HOLD BACK ENGINEERS TO OPT FOR A CAREER IN MSMESŸ Low WagesŸ Old TechnologyŸ Preference for work

experience in large scale industries

Ÿ Reputation issues in working with MSMEs

CAREER OPPORTUNITIES FOR ENGINEERS IN MSMES

Ÿ Production Supervisors

Ÿ Design EngineersŸ Marketing EngineersŸ Techno-commercial

Engineers

ENGINEERING ATLAS OF INDIACALL : 011-41041031Email: info@engineeringwatch.inwww.engineeringwatch.in/atlas

ORDER NOW

A MUST HAVE planning aide for Policy Makers &

Marketeers

Dr. M M Pallam Raju Minister of Human Resource Development, Government of India

releasing the Engineering Atlas of India