Nitin Gadkari highlights need for import substitution in MSMEs
Union minister for micro, small and medium enterprises (MSME) Nitin Gadkar on Saturday said “import substitution”, a term policy-makers use for economic self-reliance, was important for the country, underscoring the National Democratic Alliance (NDA) government’s tilt toward a model of growth that seeks to boost exports and minimise imports.
Gadkari, who spoke via videoconference at the launch of a report on MSMEs here, said the Covid-19 pandemic would likely end once a vaccine was found.
“We are 100% going to win the Covid war. A vaccine will come. But the economic war is a long one...import substitute (substitution) is important.”
“When I look at Varanasi, I get worried that it is importing silk from China. We have a good sericulture sector,” he said, adding local handloom and handicraft units needed a boost.
On the occasion of MSME Day, Gadkari launched a report, Improving Economic Dynamism and Accelerating MSME Growth, brought out by the Global Alliance for Mass Entrepreneurship, a not-for-profit.
Import substitution was the country’s main economic and industrial policy during the first few five-yearly plan periods. Such a policy focuses on replacing foreign imports with domestically produced goods.
He said the government planned to have one industry in each panchayat, boost exports and rely on “import substitution” for growth and jobs.
Gadkari said boosting exports of small and rural industries, creating a sustainable economy, with less pollution, decongestion of cities and building industrial hubs along 22 green expressways were priorities of the government.
“Our 117 aspirational districts are low on many indicators. We are focusing on creating sustainable development in these districts,” the minister said.
Small enterprises are the backbone of Indian manufacturing. They account for 29% of the country’s gross domestic product (GDP), have 22% share in exports and employ over 100 million people.
The report on MSMEs launched by Gadkari recommends simplified communication of government schemes in local languages and easier access to funds for first-time borrowers.
It also sought “an enabling business environment through simplification, digitization and decriminalization of compliances.”
The lockdown imposed to curb the spread of Covid-19 has hit small businesses the most and 57% of these units are out of cash, the non-for-profit GAME said. The recommendations were made by a task force composed of corporate leaders, policy-makers, MSMEs representatives and academic experts, according to the report.
“COVID is an existential threat particularly to smaller, informal firms. Estimates suggest that 30-40% may cease to exist. The sector urgently requires financial and regulatory support to keep businesses afloat,” Ravi Venkatesan, founder of GAME said. Venkatesan is a former chairman of Microsoft India.
Participants in the conference included Meghalaya chief minister Conrad Sangma, Uttarakhand chief minister Trivendra Singh Rawat, Karnataka chief minister BS Yediyurappa and Punjab education minister Vijay Inder Singhal. Gadkari said his ministry would “work on” the report to finalise an agenda to implement the recommendations.