SPOTLIGHT ON INDIAN ELECTRONICS Spotlight on Indian Electronics | Page 36

industrial areas / establishments located outside the

( b ) Incentive for production of equipment / machines /

NIMZ , the administrative body established through

devices for controlling pollution , reducing energy

relevant statutes of the Central / State Governments shall

consumption and for water conservation : The fund will

perform the role of the SPV .

provide incentives for manufacturing / developing :

4.2 In order to promote acquisition and development of appropriate

i .

Equipment and / or technologies used to produce

technology in the country , the following measures are proposed :

energy from the sun , wind , geothermal and other

( i ) Technology Acquisition and Development Fund ( TADF )

renewable resources ; clean coal technology ;

A Technology Acquisition and Development Fund will be

creation and management of carbon sinks .

established for acquisition of appropriate technologies

ii . Equipment used in energy-conservation

including environment friendly technologies ; creation of a

technologies ( including energy conserving lighting

patent pool ; and development of domestic manufacturing of

technologies and smart grid technologies ).

equipments used for controlling pollution and reducing energy

iii . Equipment used to refine or blend renewable fuels .

consumption . TADF will address these concerns across a broad

iv . Fuel Cells , Micro-turbines or energy-storage

based set of industries / sectors and it will be decided up front

systems for use with electric or hybrid-electric

for each sector as to how many units with a specific

motor vehicles .

technology in the particular sector will be supported .

These incentives shall consist of :

( a ) SMEs will be given access to the patent pool and / or part reimbursement of technology acquisition costs up to a maximum of Rs . 20 lakhs for the purpose of acquiring appropriate technologies patented up to a

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Five percent interest reimbursement of the nominal interest charged by lending agency ;

Ten percent capital subsidy .

maximum of 5 years generally , prior to the date of

( c ) Operation , Monitoring and Review of the Fund will be

submission of the project .

done by the Green Manufacturing Committee .

It is estimated that between 2007-2017 , 85 million persons will

specific trained workforce . Since only 6 % of the Indian

be added to the labour force . The growth of total employment

workforce receives any form of vocational training currently ,

during this period , based on the assumptions about

there is a pronounced ‘ skill gap ’ both in terms of quality and

employment elasticity and sectoral GDP growth rates , is

quantity . Overall skill gap would be significantly larger than the

estimated at 116 million . With incremental job opportunities in

incremental workforce as even the existing workforce would

agriculture being negative , entire projected increase in workers

need retraining / skill specific training . Recognizing the urgency

will be accommodated in the manufacturing and services

of interventions needed to address both the qualitative and

sectors . Additional job opportunities in manufacturing alone

quantitative gaps in skill development , the National

are estimated at 24.5 million during 2006-20171 i . Skill

Manufacturing Policy proposes to create a three tier structure

building among large number of minimally educated

for skill development .

workforce ; . All these jobs would require sector and skill

The Small and Medium Enterprises ( SME ) contribute

limited access to funding .

significantly to the manufacturing output , employment and

• Bank finances : access is limited , due to the inability of

exports of the country . It is estimated that , in terms of value ,

SMEs to create tangible assets , as also the debt-equity

the sector accounts for about 45 per cent of the manufacturing

ratio norms followed by banks . Inadequate capital infusion ,

output and 40 per cent of the total exports of the country . The

resulting in denial of adequate bank finance , is one of the

sector is estimated to employ about 59 million persons in over

basic reasons of sickness in such units .

26 million units throughout the country . Further , this sector has consistently registered a higher growth rate than the rest of the industrial sector . There are over 6000 products , ranging from traditional to high-tech items , which are being manufactured by the SMEs in India . The MSME sector provides the maximum opportunities for both self-employment and jobs after agriculture sector .

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Venture Capital / Private Equity Funds : First generation entrepreneurs , investing in SMEs , have also found access to VC funds difficult , despite the Venture Capital ( VC ) and

Private Equity ( PE ) market having grown considerably in

India . As per industry sources , there are over 250 VC / PE firms operating in India and the total private equity investments in the calendar year 2010 , until September ,

6.1 Access to Finance

2010 , stood at $ 7.18 billion . However , VC / PE firms exhibit

One of the major challenges faced by SMEs is inadequate

a marked preference to invest in medium and large sized

access to adequate and timely finance , mainly due to lack of

firms . The reasons for this include greater costs of

financial information and non-formal business practices . They

monitoring of SME units , non-formal operating structures ,

are largely dependent on promoters ’ resources and loans from

inadequate levels of disclosure , etc .

financial institutions and banks .

• Capital Markets : are difficult to access , due to high costs , difficulties in complying with regulatory requirements etc .

• Promoters ’ equity : by its very nature , can provide only