After a slowdown, registration of Micro, Small and Medium Enterprises (MSMEs) in Odisha has picked up momentum. The year 2015-16 has seen nearly a four-time rise in MSME registration in the State if one goes by the number of the Udyog Aadhar Memorandum (UAM) filed at the State Directorate of Industries.
According to data available with the MSME Department, during the last decade (2005-6 to 2015-16) the average annual growth rate of filing of Entrepreneurial Memorandum-II (EM-II) has been around 10 per cent in the State against the national average of over 12 per cent. However, the year 2015-16 saw a whopping 11, 809 MSMEs registered in the State, which is nearly a rise of 290 per cent compared to mere 3,000 EM-II filed in 2014-15.
However, the data with Directorate of Industries show that with nearly 30,000 MSME units being set up in 2014-15 in the State, in terms of number of MSMEs set up this has been the highest-ever year-on-year hike (326 per cent) in the State’s history. These statistics show that the State’s MSME sector has started looking up since 2014. And the single-most plausible reason: Introduction of the ‘ease of doing business’ concept by the Centre and hectic efforts made by the State to make it into the top-5.
“The filing of EM-II was cumbersome. Whereas UAM is hassle-free and has no fee to charge for its filing. Besides, UAM needs no documentation as it is a single-page self-declaration online process. EM-II is essential for MSMEs because banks/FIs consider this to link credit to a unit,” informed a senior official in the MSME Department.
A senior RBI official, however, indicated that the MSME potential in Odisha is underexplored, which is evidenced from the fact that an industrial district like Angul has very low density (below 3,000) of MSMEs. He added that a total of six districts have very low/low density of MSME units. Interestingly, the districts are Bargarh (rice bowl of State), Kandhamal, Rayagada, Koraput and Keonjhar. Almost all the districts are rich in either farm produces or minerals or both. Significantly, due to poor food processing, farmers in the belt are into distress selling of their products.
And the revelation after a profile-check of the MSMEs set up in the State is only around 18 per cent of MSMEs set up in the State cater to food and allied sectors whereas a whopping 56 per cent belong to the repairing and servicing sector. This is the biggest reason why employment generation in MSMEs in Odisha is of smaller scale vis-a-vis nationally.
As the Odisha Government is making hectic efforts to bring up more ‘Startups’ in the State, experts suggest that the State set up a technology acquisition fund like in Gujarat to assist industrial entrepreneurs who are willing to upgrade existing technologies. Moreover, like Kerala, Odisha should earmark a certain percentage of the State Budget to bring up new Startups in a fixed timeframe, the experts add.
The experts observed that with less than 1 per cent foreign tourist visiting Odisha, it is high time the State should go overdrive like Tamil Nadu and Gujarat to bring up MSMEs in the ecotourism sector.