Last year, I had mentioned on this function about the government’s new strategy based on Cluster Development that offers a holistic and integrated approach to the promotion and development of the MSME sector. I am happy to say that several Ministries and agencies have moved ahead in this matter.

The Government has also identified six centers – two each for handlooms, powerlooms and handicrafts – for development as Mega Clusters. Through these initiatives, we intend to significantly scale up the production of MSMEs located in these Clusters for both domestic and global markets.

Affordablity and timely credit to the MSME sector is of critical importance for their sustained development. The target we set in 2005 was to double the flow of bank credit to this sector in five years.

I am happy to note that the credit flow has more than doubled from Rs.67,000 crore to Rs. 1,48,000 crore since 2005. I understand that the Public Sector Banks which have excelled in making credit available to the micro and small enterprise sector have been felicitated today and I congratulate them for this outstanding performance.

I congratulate them while urging the other Banks to emulate them in ensuring higher flow of funds to this sector. It is noteworthy to mention that more than 1 lakh proposals have been approved under the Credit Guarantee Scheme by the Credit Guarantee Fund for Micro and Small Enterprises. The Risk Capital Fund of Rs.2000 crore with Small Industries Development Bank of India announced in the budget of 2008-09 will facilitate flow of enhanced equity support and venture capital to MSMEs.

I would urge MSME units to take full advantage of these many initiatives of the government. On this day when we celebrate the vitality of India’s smaller companies, it is the latent potential of our youth that should also engage our attention. With one of the youngest populations in the world, India is estimated to have the capacity to create 500 million skilled and trained technicians by the year 2020 and claim a fourth of the global workforce. Education and skill development can be India’s global opportunity.

Our government has made education the core of the 11th Five Year Plan. In our National Action for Skill Development, we would like to set for the country the ambitious goal of 500 million trained people by 2020 in keeping with Smt. Sonia Gandhi’s vision of Rozgar Badhao. We need to work towards realizing this bold vision through coordinated action in which government and industries and training institutions must be co-partners.

Governments at the Central and State levels, industry, and society, financial institutions and society at large will all have important role to play in this mission of skill development.

There are many simple measures which can help to accelerate the pace of skill development in our economy. I have recently written to Chief Ministers to consider opening up the public stock of buildings of educational institutions of the High School level and above after class hours for those agencies and groups who are engaged in skill development for our youth. I hope Chief Ministers will respond positively and agencies that promote skill development in the private and public sector will be able to utilize these new opportunities. I urge the members of the banking community here to think of innovative ways to make skill acquisition by the youth a bankable proposition. 

I am sure that the MSME sector will continue to contribute handsomely to the balanced economic and social development of our country. (PM’s address at the Presentation of National Awards to Micro, Small and Medium Enterprises)