“For the first time, an integrated unit will help new and existing businesses develop by providing services such as management training, and office space,” an official confirmed. Ultimately planned for every district, the ministry is targeting the launch of 20 EDCs out of a planned 500 by the end of the current financial year, another senior official said. As of now, MSME Development Centres in various states have begun the EDC initiative on a small scale, some of which may be expanded, they added.
Spreading awareness and motivation, allowing business linkages and providing incubation with government support will be the prime focus of the initiative. It will also offer “enterprise development courses, vocational guidance and skill development for budding entrepreneurs”.
To this end, the office of the development commissioner for MSMEs is in talks with entrepreneurs from the private sector to visit the centres and conduct classes as well as provide effective hand holding for smaller firms. Business career counselling and aptitude tests that identify the ideal streams for each individual, will be part of the package.
It would also aim to plug the financial difficulties faced by MSMEs, suffering from a liquidity crisis since the demonetisation exercise. In the distant future, incentives and loans by the government for the sector will also flow through the EDCs, after determining the capabilities of the firm through set parameters, the official added.
The centres would offer credit facilitation and syndication, export promotion and supplier inclusion. The EDCs will also have “enterprise clinics” for struggling firms, which the government hopes will reduce the number of small businesses falling into a debt trap financed by bank loans. The presence of common facility infrastructure will reduce unit cost for small players, the government hopes.
Through the initiative, the government is also trying to address a key concern for policymakers, the lack of businesses in the “small” category, the official added. According to the existing definition, which relies on self-declared investment on plant and machinery, “small” firms are those with investment between Rs 25 lakh and Rs 5 crore.
The government hopes that EDCs will also expand the entrepreneur base by drawing individuals from the diverse demographies such as youth, women, scheduled castes and tribes and disabled backgrounds.
The centres will be broad-based and shall be run by special purpose vehicles in partnership with the private sector, business management organisations, local industry associations.
As part of the ministry’s wider efforts, it is also aiming to establish the National Resource Centre (NRC). It will assist in export strategy development, implementation and mobilisation of technical assistance to organizations in the MSME ecosystem.