A seasoned leader with a track record in the information technology and services industries, specialized in Marketing Management, Business Planning, Operations Management, Analytical Skills, and Government, a Professional with a Bachelor of Science from Jamia Millia Islamia in Physics, Chemistry, and Mathematics and currently serving as the Chairman and Director General at Confederation of Indian MSME in ESDM and IT. Mr. Jairaj Srinivas shares his Confederation of Indian MSME activities in ESDM and IT with Business Review Live.
Confederation of Indian MSME in ESDM and IT (CIMEI), an association formed by the Electronics and Semiconductor Segment leaders to support the MSMEs in the Electronics System Design & Manufacturing (ESDM) and IT. What are the factors that galvanized the formation of this Association?
There are many associations that relates them to Electronics. Most of them are basically lobbying for Large Companies or MNCs with Government to bigger size of cakes in the Policies and benefits announced for the Industries and the demands of MSME are not only ignored but neglected. The MSME members in most of the associations are just a number and are used to Association to project themselves as a large organization with support from all industry segments. Each Association promotes MNC’s Like Intel, Panasonic, Foxconn, Samsung, IBM, Lenovo etc.
MSME in electronic sectors is playing an important role in Indian Economic growth by providing large employment. It is estimated that in terms of value, the MSME sector accounts for about 45 % of manufacturing outputs and 40 % of the country’s total exports. Employment distributed is about 595 lakh persons in over 261 lakh enterprises throughout the country. These MSME’s industries are scattered among various associations, and they are in very small numbers in large associations. Hence voice is unheard.
Why do you think that MSME in the ESDM sector is the most neglected sector?
MSME sector is one of the most neglected sectors with respect to public policy though it has played an important role in the transformation of the Industrial sector. In India, the ‘Make in India’ program cannot do well without the MSME sector doing well. Despite all this, the sector remains highly troubled.
- MSME in ESDM has several unique problems. The fact that roughly 95 percent of enterprises in the sector are still unregistered cannot be ignored. These enterprises are outside the ambit of formal schemes and programs of the Government.
- The second issue is that the unorganized nature of the sector results in the lack of marketing support at the national and international level and a lack of integration in the global value chains. It has resulted in the restriction of goods and services to only local markets, resulting in revenue loss to the people employed in the value chain of the overall network. A collaborative approach between the stakeholders of the MSME ecosystem can help improve quality and give access to markets for a large number of MSME enterprises.
- The third major issue is the feeling of trust between an agglomeration of firms/enterprises and even between a firm and the Government.
- Firms feel that the Government is taking information from them to get taxes or harass them rather than helping the enterprises to achieve their true potential. It is even seen a large amount of enterprises feel that Government is a major barrier to innovation.
- Another major problem is with respect to labour laws in the sector, which makes the firms perceive the Government as a problem rather than a helper/collaborator.
- Fourth is the issue of credit flow to the sector. The RBI has adopted the recommendations of the PM’s task force on MSMEs more than a decade ago and continues to use it for schemes to benefit MSME sector. Still, banks’ implementation of these schemes and benefits to the individual firms are seen as major challenges that are seen on the ground.
- Fifth issue is innovation in the MSME sector. MSME can’t afford to spend on R&D and Innovations as there is always a cash crunch in MSME sector.
How do you help central and state-level government bodies in forming the policies? And how effective has it been so far?
We conduct regular studies on the policy announced and its implementation on the ground with the help of our members so that we get accurate data and share the same with State and central policy drafting team while suggesting Industry needs and global scenarios. Often, government policymakers agree with our opinion, but sometimes due to pressure from their political bosses, 30% – 40% of suggestions made by trade associations are accepted without mentioning the name of contributing Association.
What are your steps in ensuring the benefits of government policies getting to the right MSMEs?
Whenever policy gazettes are released by the Government, our team thoroughly and translate in a simplified form that our member can understand and share with them. We also ensure the proper implementation of policy as per the announcement made in the policy document. It is part of the mandate to educate, advocate, interpretation of the policy for the benefit. Specific grievances are handled independently, depending upon the urgency.
How impactful has CIMEI been in fostering entrepreneurship and productivity in the region, thereby helping to succeed Make in India & Atamanirbhar Bharat?
WE are committed to encourage and promote Make in India & Atamanirbhar Bharat. We strongly advocate building a complete ecosystem of ESDM through component-level manufacturing in India. Today most of the products are manufacturing in Complete Knockdown (CKD) mode. We want to encourage Semi-Knockdown (SKD) while consuming locally manufactured components.
CIMEI is headquartered in Bengaluru, the IT Hub of India; tell us more about broadening your services to the other parts of India.
We already have operation Chapters in Andhra Pradesh, Telangana, Tamil Nadu, Madhya Pradesh, Utter Pradesh, New Delhi, Maharashtra, and Gujarat. We are still looking forward to having our presence in Assam, NE States.
Tell us about your current team and your future outlook?
All Chapters headed by a State Chapter Head with his deputy. We want to engage with every state and central government. Due to the current pandemic situation, we are unable to meet any of the Bureaucrats or Political leaders; however, we meet them virtually. We are already a brand and we look forward to having a member base of 3000 nos. by FYI 2021-22, covering the entire spectrum of the ESDM sector, including design houses.