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President's Message |
" Access to finance remains one the biggest challenges before MSMEs- almost everywhere in in the world. The degree of scarcity and the reasons may differ from country to country, though. In India, government tried to address the issue through various tools: Directed flow of funds though priority sector lending, Credit guarantee cover for smaller loans below Rs 1 Cr etc. However, various gaps remain. One of the major ones is unavailability of reliable information about the credit history of the borrower. Since 2004, only CIBIL tried to capture credit history of borrowers and positively impacted flow of credit to consumer loans. Now, several more Credit bureaus are being established which are developing creditworthiness models unique to India also focusing MSMEs. IFC/World Bank and FISME have been holding a series of workshops to apprise MSMEs as to how MSMEs can build their scores better and increase their chances of raising loans at better terms. The recent workshops at New Delhi, Mumbai and Goa was an eye opener for entrepreneurs. So far Banks do not share credit scores with customers and charge same rates from most of the customers. That needs to change to achieve transparency. If there is clear link between a better score and better terms of loan, borrowers would be more responsible. Let’s hope with new credit bureaus coming in the financial markets, MSMEs access to finance will certainly witness better days.
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Dr. Sangam Kurade President FISME
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Vol IV, Issue 118: Nov 1, 2016 |
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Activities |
The World Bank Group joined hands with Federation of Indian Micro and Small & Medium Enterprises (FISME) to organise a 5 city campaign wherein experts from WBG would talk the growing importance of credit information in today’s global business operations and about the functioning of the credit information bureaus operating in India.
After the success of the previous programmes in Faridabad, Bangalore, Chennai and Mumbai, similar event was organized in Goa on 28th Oct 2016.
The programme in Goa was organised in association with GCCI, GSIA and BNI.
In continuation of their joint efforts towards “Identifying implications of GST and facilitating adoption by MSMEs”, SIDBI the focal financial institutions for MSMes and FISME, the leading federation of MSME Associations in India, organised a roundtable at Mumbai on 25th October, 2016.
Eminent tax and GST expert Mr. Bimal Jain was the main speaker at the programme and he explained the nuances of the model GST law to the participants.
Mr. Jain also identified the crucial gaps in the planned system and suggested that MSME bodies take up these issues with the Government of India at the earliest for redressal.
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Business Banter: Lessons from Entrepreneurs |
In an ecosystem where hyperbolic optimism is the norm, Pepperfry's Ambareesh Murthy has his expectations grounded in the startup reality. "It is not easy to dismiss the idea of work-life balance, at least in the initial years of starting up, but that is just one among the many occupational hazards that come with taking the entrepreneurial leap," he says in a conversation with UpGrad Talks.
Started five years ago, Pepperfry has carved a niche for itself in the online furniture space in India. And this victory has been the result of a concerted effort to provide customers a seamless service.
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Writing on the Wall |
Reading the World Bank’s much awaited “Doing Business 2017” report from India’s perspective can be a disorienting exercise. The report is fulsome in its praise of various reforms undertaken by the Narendra Modi government.
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Media Monitor |
Macro Metre
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The final rates for gamechanging GST were announced today with the government panel fixing a 4-rate structure at 5%, 12%, 18%, 28%.
Announcing the GST rates, finance minister Arun Jaitley said the threshold rate was 5%, which would apply to items of mass consumption or aam aadmi products. "There will be standard rate of 12 and 18% on other items."
"Tobacco will fetch 28% sin tax, excluding cess. Aerated drinks will also fetch tax at the same rate. Most white goods to be taxed at 28% but with riders," he said.
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Expressing disappointment at India's rank remaining low in terms of ease of doing business, Union minister Nirmala Sitharaman today said the efforts and reforms undertaken by the Centre and states have not been adequately captured in the ranking released by the World Bank.
"I am a bit disappointed. Not only the government of India, but every state is so actively engaged and wants to ease the situation... But for whatever reason, it has not been adequately captured in the ranking," Commerce and Industry Minister Nirmala Sitharaman told reporters here.
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Notwithstanding criticism, the government is of the view that the proposed cess on luxury and sin goods under the goods and services tax (GST) regime is the best way of creating a corpus to compensate states for any revenue loss, as consumers will have to pay significantly more if the fund is financed from regular taxes. The government is also firmly backing its four slab-GST structure as it feels it’s the most appropriate system for a country where indirect taxes contribute a big percentage of the exchequer’s revenue and where tax rates on mass consumption items should remain low.
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The Goods and Services Network (GSTN) has signed a Memorandum of Understanding (MoU) with Director General of Foreign Trade (DGFT) for sharing of foreign exchange realisation and Import Export code data, a move that is expected to strengthen processing of export transactions of taxpayers under GST, increase transparency and reduce human interface. The Memorandum of Understanding was signed by Ajay K Bhalla, Director General of Foreign Trade and Prakash Kumar, CEO, GSTN in New Delhi on 27.10.16.
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Food prices, a key component of the consumer price index, are expected to remain moderate in coming months and help keep retail inflation in the country below 5%, giving the Reserve Bank room for further rate cut, economists and farm experts said. Prices of pulses, which led the spike in food prices, are already down, with tur and urad selling up to 25% lower than last year due to higher supply and favourable base effect.Prices of pulses had almost doubled in north India during the same time last year before moderating early in 2016.
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GIZ jointly with Office of DC-MSME, Ministry of MSME and in partnership with FISME, IFC and TFSC is organizing an international policy workshop on “Innovation Voucher” in the national capital on November 24-25, 2016. The first day has been designed to understand and analyze the design, structure, different implementation mechanisms as well as different approaches, success stories and risks involved in implementing Innovation Vouchers. The day two is devoted to analyze the appropriateness, feasibility of Innovation Voucher for India and develop a roadmap for a potential adaptation of the instrument.
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Managing Director of Bengaluru based Techno Spark Industries India, Mohan Suresh, who is also a past President of industry body FISME, received National MSME Award here today.
Mr Suresh was presented the award by Union MSME Minister Kalraj Mishra and MoS Giriraj Singh. Mohan Suresh, the Consul of Rwanda, said, “PM Modi giving award to the MSME entrepreneurs will boost the morale of the sector.”
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The Ministry of Micro, Small and Medium Enterprises (MoMSME) is organizing an awareness programme on Zero Defect Zero Effect (ZED) Certification Scheme in the city on November 8, 2016.
The programme is being jointly organized by industry body FOSMI along with MSME-DI Kolkata, Ministry of MSME, Government of India.
The objective of the programme is to create proper awareness in MSMEs about ZED Manufacturing and motivate them for assessment of their enterprises for ZED rating.
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Giving boost to the job working units, many of them are from micro, small and medium enterprises (MSMEs), the Director General of Foreign Trade (DGFT) has recently included a list of service providers under the Common Service Providers (CSP) in the Export Promotion Capital Goods (EPCG) scheme.
In a notification DGFT said this adding that the newly added CSP can now avail EPCG benefits.
DGFT said, “There may be multiple garment exporters obtaining services at different stages of garment manufacturing, such as knitting, dyeing, compacting, printing, embroidering, labelling, cutting etc, from a number of other units who own these facilities but do not engage in the export of garments.
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State Scan |
Jammu & Kashmir
The Jammu MSMEs have urged the J&K Government to implement the ancillarisation policy in the state to protect the packaging and other related industries engaged in the manufacturing of products required by the PSUs & Large Scale Units. In this regard, the Bari Brahmana Industries Association (BBIA) held a meeting today to discuss the issue,
Lalit Mahajan, President, BBIA, said, “The meeting was to discuss the implementation of ancillarisation policy by the State Government for providing due share in the purchase
Karnataka
In order to handhold the micro, small and medium enterprises (MSMEs) get themselves registered online with the MSME Data Bank, Karnataka Minister of SSI Ramesh L Jarkiholi launched a helpdesk at KASSIA here on Thursday. Appreciating KASSIA’s initiative, the Jarkiholi noted that the efficacy of targeted Government Schemes required a robust engagement by Industry Associations like KASSIA, and added that on its part, the Government of Karnataka was fully committed to help in the cause.
Kolkata
Keeping in view the financial stress faced by MSMEs due to delayed payment by the large companies, an interactive session with officials from State MSME Department and Senior Supreme Court Lawyer is being held for the city based micro, small and medium enterprises (MSMEs) entrepreneurs. In a communication to the MSMEs, industry body FOSMI said, “As you are aware, a perennial problem for MSMEs is that of delayed payments by large scale buyers. There are however provisions in the MSME Development Act 2006 to deal with this problem of delayed payments. The full extent of the advantages available under the Act for MSMEs with regard to delayed payment is not widely known.”
Rajasthan
In a unique way to wish traders Happy Diwali, Rajasthan Chief Minister Vasundhara Raje has announced discount in electricity tariff to the city based traders for Diwali decorations.
The move aims to make the shops more attractive. On the instructions given by the chief minister, the order has been issued by the state government in this regard.
According to the notification, the shopkeepers and traders applying for temporary connections for Diwali decorations will have to pay the commercial rate rather than 1.5 times the commercial rate which was charged earlier.
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World Watch |
Bhutan
In a move that would strengthen the regional value chain, the Union Cabinet has approved an Agreement on Trade, Commerce and Transit between India and Bhutan.
Presently, the bilateral trade relations between India and Bhutan are governed by the Agreement on Trade, Commerce and Transit between the Government of India and Bhutan. The Agreement provides for a free trade regime between two countries.
Japan
The amended bilateral tax treaty between India and Japan, which provides for strengthened exchange of information to help reduce tax evasion, has come into force from October 29.
The agreement to amend the 27-year old Double Taxation Avoidance Agreement (DTAA) was signed when Japanese Prime Minister Shinzo Abe visited India in December 2015. In a notification, the Department of Revenue said, "All the provisions of said Protocol amending the Convention between the Government of India and the Government of Japan for the avoidance of double taxation
Pakistan
If one goes by a Pakistani media report, the Pakistani traders are considering to suspend trade with India under the current “hostile” conditions.
According to a report published in Pakistan’s Dawn News, the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) has last week said that “Pakistan had no compulsions of any sort to continue business and trade relations with India under the current hostile conditions”.
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Upcoming Events |
SIDBI-FISME national campaign on GST: Roundtables, Webinars and Guide for MSMEs 3rd in the series GST: Identifying implications & facilitating adoption by MSMEs
3rd week of November, West Bengal
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FISME’s official Twitter handle @fisme |
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KNN India’s official Twitter handle @knnindia |
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Other Events |
India Auto Expo
Date: 05th – 06th Nov 2016
Venue: Chennai Trade Centre, Chennai
See Details
Waptema water expo-Lucknow
Date: 07th – 08th Nov 2016
Venue: Indira Gandhi Pratishthan Gomti Nagar, Lucknow
See Details
Business Opportunities Show Aurangabad
Date: 09th Nov 2016
Venue: Hotel VITS, Aurangabad
See Details
India and UK Technology Summit & Knowledge Expo
Date: 07th – 09th Nov 2016
Venue: Hotel Taj Palace, New Delhi
See Details
BioFach India
Date: 10th – 12th Nov 2016
Venue: NSIC Exhibition Complex, New Delhi
See Details
UMEX - Used Machinery Expo
Date: 11th – 13th Nov 2016
Venue: Chennai Trade Centre, Chennai
See Details
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Your Views |
Will you considerate the thought to boycott Chinese products this festive season?
According to the FISME Factor, 100 percent of Micro, Small and Medium Enterprises (MSMEs) have given consideration to the thought to boycott Chinese products this festive season.
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Knowledge Store |
HR Heuristics
Tried and tested methods of managing work can spell disaster
Several tools and techniques to manage work have been perfected over the last century. They revolve around elaborate planning, a hierarchy of command, and measurement and analysis. Those familiar with formal project management terminology would know phrases such as work breakdown structure, Gantt charts, scope statements and critical paths. These have a proven track record, but they are contrivances of the industrial era.
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Finance Fundamentals
RBI allows start-ups to raise $3 million through ECBs
Reserve Bank of India (RBI) has allowed start-up companies recognised by the government to borrow up to $3 million per financial year for a three year tenure through external commercial borrowings (ECBs).
The money raised can be used for any expenditure connected with the business of the company.
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Marketing Mantras
Here's why brands cannot exist without print and television media
The importance of print and television media spans not only the e-commerce category but a host of others as well – FMCG, telecom, mobile handsets, auto, finance, education to name a few. The undisputed reach of both these medium and the specific strength they lend a campaign is enormous.
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Policy Polemic
Why India needs to move from a controlling to an enabling environment
1991 was a 'strategic inflection point' for India. It heralded the progress India was making in economic liberalization, globalization and market-driven ambience. Fast forward 25 years, and these strong foundations have signaled The International Monetary Fund to project that India's GDP will grow by 7.4 percent for 2016-17 - making it the world's fastest-growing large economy.
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SME Special
Bringing method to washing dirty linen
It is a business that has seen a rush of new ventures in the last two years – some put the figure at over 75 ventures – trying to grab a piece of the pie whose size is large but not clearly known. But, now as the complexities of the business sink in, many are floundering, some have closed down and a few others have been bought over.
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Success Story
Time Magazine's list of influential teens include stars from Disney, Obama's daughters
Time Magazine's list of 30 most influential teens this year includes everyone from Disney Channel stars and pint-sized chefs to aspiring scientists and US President Obama's daughters. But in the era of startup success, can any list exist without entrepreneurs on it? Three of the 30 teens featured have set up companies that have made them millionaires even before they got their driving licences.
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Stockpile
The Central Statistics Office (CSO), Ministry of Statistics and Programme Implementation, has released the Consumer Price Index numbers on base 2012=100 for rural, urban and combined for the month of June 2016s
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Quotable Quotes
“ Opportunity is missed by most people because it is dressed in overalls and looks like work ”
– - Thomas Edison, an American inventor and businessman.
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Country Chronicles |
FISME regularly receives monthly reports on the economies of various countries from their missions in India. These reports provide information on key economic parameters, trade related information and all news relevant for importers and exporters. In this edition you can take a look at reports on:
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New Members |
During the period from 01st September to 15th September 2016 a total of 2 new MSMEs became member of FISME
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Reader Reactions |
Write and Win prize!
Write your comments on the FISME Factor. Share your views and suggestions on MSME issues. Win prize! The best mail will get a special book every fortnight.
send mail to: newsletter@fisme.org.in
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Editorial Team: |
Hon. Editor: Anil Bhardwaj
Asstt. Editor: Simmi Nagpal
Types setting & websdesigning: Sanjay Sachan
Video & Photography: Vipul Kumar Chettry
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