FDI can help develop MSMEs: Muniyappa

Union Micro, Small and Medium enterprises (MSME) Minister K H Muniyappa today said allowing

RELATED ARTICLES

FDI into the sector will not only ensure fund flows but also help the overall development of the segment.

"FDI (foreign direct investment) in MSME will ensure availability of more capital necessary for the overall growth of the sector, which contributes nearly 40 per cent to the country's total exports," Muniyappa told reporters after a meeting with the officials of Khadi & Village Industries Commission (KVIC) here.

He also clarified that FDI would be allowed in the sector without impacting the interest of the players.

"We are in favour of FDI in the sector, but at the same time we will not allow the interest of the local players to be impacted. We are currently formulating a detailed plan for the same," he said.

Last month, the government tweaked sourcing norms for FDI and diluted the previous condition to source 30 per cent of requirements 'mandatorily' from MSMEs, by stating that sourcing should be done 'preferably from MSMEs'.

The government has allowed 51 per cent FDI in multi-brand retail and 100 per cent FDI in single-brand retail.

"Investments and FDI is necessary mainly to bring the modern concept of marketing in the sector, which is currently very weak," a KVIC official said.

He said 51 per cent investment by private sector is expected in the Khadi Reform and Development Programme initiated by the Asian Development Bank (ADB) with the government, which aims at revitalising the khadi industry through a comprehensive reform package.

"Leading private players in the organised retail sector have shown interest in partnering with us. We are working out the modalities in this regards. We plan to offer them 51 per cent stake," the official said.

Meanwhile, the ministry has also proposed to increase the project size to Rs 50 lakh from Rs 25 lakh for the availability of finance with banks and financial institutions.

"We have already held talks with bankers and they have agreed to provide full assistance to the sector," minister said, adding, "besides, the allocation of funds for the sector will be doubled in the 12th Five Year Plan as compared to the 11th plan."

Post new comment

E-mail ID will not be published
CAPTCHA
This question is for testing whether you are a human visitor and to prevent automated spam submissions.
Image CAPTCHA
Copy the characters (respecting upper/lower case) from the image.

EDITORIAL OF THE DAY

  • Govt can’t clamp down on voices that ask uneasy questions

    It has hardly been a peaceful annum for Greenpeace’s India arm that has been in and out of trouble over the last one year.

FC NEWSLETTER

Stay informed on our latest news!

INTERVIEWS

Sarthak Raychaudhuri

vice-president, HR, Asia South Whirlpool of India

GV Nageswara Rao

MD & CEO, IDBI Federal Life

Timothy Moe

Goldman Sachs

TODAY'S COLUMNS

Varun Dutt

<b>Risk Factor:</b> The blame game

In decision-making, the fundamental attribution error (FAE), also known as ...

Zehra Naqvi

Dignity of labour is dignity of life

M Rafi Khan, a retired police IG, used to ...

Gautam Gupta

Retailers have it tough, thanks to e-commerce

For the past few months our focus has been on ...

INTERVIEWS

William D. Green

Chairman & CEO, Accenture