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