Union Minister for Micro, Medium and Small Enterprises (MSME) & Road Transport and Highways, Nitin Gadkari has suggested that companies must invest about 2-3 per cent of their annual profits into R&D as the conversion of knowledge into wealth played an important role in the development of the industry.
The minister made this observation while addressing representatives of the Engineering Exports Promotion Council (EEPC) on the post-pandemic situation over video conferencing.
Gadkari said that although there were short-term difficulties being faced by each sector of the economy during the nationwide lockdown, “positivity and self-confidence” would help one overcome the immediate hindrances. He especially stressed on effective collaboration and cooperation among all stakeholders in the economy.
During the interaction, the minister highlighted the importance of the MSME sector and applauded its contribution to the country’s GDP, exports and employment generation. He said that the MSME sector currently contributed about 48 per cent to the country’s export and this had to be further enhanced by means of technological upgrades and product development.
He also added that a substantial decrease in logistics, transport and labour cost would help in the development of the Indian manufacturing sector. He mentioned that the other important factor that needed to be developed was packaging and standardisation facilities in India to support exports from the country, as the world gradually overcame the COVID-19 pandemic.
The minister said that the MSME ministry had created a Fund of Fund to give equity support to the Indian MSMEs. MSMEs with a good turnover, GST return record and income tax record would be reassessed, given a rating and thereby supported with 15 per cent equity from the government. This will enable them to gradually raise money from the capital market, enlist themselves in the proposed MSME stock exchange and attract foreign investment.