Foundation of Economy
-----------------------------
On
31 Oct , PM Shri Modi unveiled the Statue of Unity
For
2 days, media ( online and offline ) were full of reports / articles / analysis
of its significance
Newspapers
printed millions of words and TV channels devoted hundreds of view-hours
Statistics
were regurgitated : height / weight / concrete / steel / copper / workers /
years / cost etc
Then
on 2 Nov , Shri Modi laid the foundation of a low cost economy, by announcing a slew of
measures to boost our MSME sector
TV
channels mentioned this in a passing reference of a few minutes
Newspapers
barely devoted a few column-centimeter of real estate
Hardly
any expert-panel debated its significance !
What
makes MSME sector, the foundation of our economy
?
Here
is what :
· Country-wide
65 million MSME provide jobs to 120 million persons ( as per Shri Giriraj Singh
– Minister of State for MSME )
· MSME
sector contributes 38 % to our GDP and 45 % to our Exports / Manufacturing
output
I
am referring to the announcements made by Shri Modi with regard to boosting MSME sector
These
announcements will help lower the COSTS of
the following INPUTS :
=====================================
COST of MONEY
· Quick
access to credit at attractive terms ( Rs 1 crore in 59 minutes
! )
· 2
% subsidy on interest ( for MSME registered for GST )
· MSME
exporters to get 5 % interest subsidy ( up from current 3 % )
· Credit
based on trade receivables ( by analyzing GST / Income Tax Returns )
===================================
COST of TECHNOLOGY
· Rs
6,000 Cr scheme for technology up-gradation ( 20 hubs / 100 spokes )
===================================
COST of COMPLIANCE
· Returns
under certain Labour Laws to be filed once a year ( instead of twice a year )
· Computerized
software to decide inspection of MSME factories
· Inspectors
to file their reports in 48 hours
· Easier
process for Environment Clearances and “ Consent to Establish “
=========================
===================================
COST of LAND
· 70
% cost of “ Pharma Clusters “ to be borne by the government
=========================================
COST of SELLING
· Minimum
procurement by PSUs ( from MSME ) raised to 25 % ( from current 20 % )
· 3%
procurement from MSME run by women
========================================
COST of MANPOWER
· A
mission will be launched to ensure that MSME employees have Jan Dhan
Accounts, provident fund, and insurance
=====================================
These measures make for a
GOOD BEGINNING , and I hope that announcements which will further lower
their INPUT COSTS , will be made soon
But, we have a long way to go
to make ours’, a truly LOW COST ECONOMY
I urge the Policy Makers to
look up my following blogs ( earlier sent as emails ) , for suggestions on how
to lower the costs of the following left out INPUTS :
·
Land
·
Machineries
·
Materials
·
Manpower
·
Energy
·
IT / Communications
·
Transport / Logistics
·
Training / skilling
·
Systems / Procedures
Level Playing Field ? …………………………………………………………………………………[ 11 June 2016 ]
How to break the
vicious circle ? ......................................... …………….[ 03 July 2016 ]
Teach them to
fish ……………………………………………………………………… …………… .[ 05 Nov 2016 ]
Automation is
Inescapable ……………………………………………………………………………[ 30 Nov 2016 ]
Gist :
Reduce " Cost of
Inflation " by limiting " Annual
Wages-Salaries Increases " to 75 % of
the preceding year's
GDP number ( ie: if GDP for 2015, is
8 % , maximum salary /
wage
increase that can be granted on 01 April 2016 , will be 6 % )
.
How much capital
needed to create ONE job ? ………………………… ……………[ 22 June 2017 ]
Solar Power at
Re 1 / kwh ? …………………………………………………………. [ 29 Jan 2017 ]
Unlimited Power
and around the clock …………………………………………. [ 29 July 2016 ]
Universal Basic Income ………………………………………………………………..
……………[ 20 Jan 2017 ]
Can Indian IT
re-invent itself ? ……………………………………………………..
……………[ 03 Feb 2017 ]
HOW CHINA MAKES CHEAP ? ………………………………………………………………………[
08 Nov 2014 ]
" BACK FACTORY " OF THE WORLD ? …………………………………………………………..[ 09 Sept 2015 ]
How to Boost Economy ………………………………………………………………………………[ 20 Sept 2017 ]
In a State of
Denial ? ………………………………………………………………………………….[ 22 Sept 2017 ]
What would
happen ? ………………………………………………………………………………….[ 29 Sept 2017 ]
Discovering the Obvious ? …………………………………………………………………………..[ 30 Nov 2017 ]
Not Good Enough ! ………………………………………………………………………………………..[ 02 Dec 2017 ]
Saving Jobs : Creating Jobs …………………………………………………………………………
[ 19 Dec 2017 ]
Free Electricity ? Possible ………………………………………………………………………
…. [ 28 Dec 2017 ]
Of Interns and Apprentices ………………………………………………………………………….[ 07 Jan 2018 ]
Whose Interest
? ………………………………………………………………………………………..[ 26 Jan 2018 ]
Car Grave-Yard
of World ? ……………………………………………………………………… [ 14 Feb 2018 ]
Modiji’s ( incomplete ) Message ! ………………………………………………………………. [ 13 Mar 2018 ]
A
Robotic Invasion ? …………………………………………………………………………… [ 19 Apr 2018 ]
An Important Challenge ? …………………………………………………………………
. [ 01
July 2018 ]
The E Commerce Elephant ……………………………………………………………………………[ 02 Aug 2018 ]
And
a final observation :
Without
waiting for formulation of any MSME POLICY , Shri Modiji just went
ahead and made these announcements !
I
urge Shri Modiji to encourage his cabinet colleagues to start making similar
announcements without waiting for finalization of the following :
#
Electric Vehicles Policy
#
E Commerce Policy
#
Data Protection Policy
#
Old Vehicle Scrapping Policy
#
Export Policy
#
Intelligent Transport Policy
#
$ 5 Trillion GDP Economy Policy
#
Solar Energy Storage Policy
Of
course , in hindsight , some decisions may turn out “ poor “ and seen as “
mistakes “
But
“ not taking any decision “ is not an option !
There
is no shame in admitting such “ honest mistakes “ and make a “ course correction
“
Thank
You , Shri Modiji !
04
Nov 2018
www.hemenparekh.in / blogs
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