On the suggestion of the Ministry of Small Scale Industries, Government of India, the United Nations Industrial Development Organisation (UNIDO) initiated the process of setting up the Foundation for MSME Clusters to assist institutions in undertaking effective and inclusive cluster-based local area development in developing and transition economies. Typically the reasons for promoting a cluster are to give offer collective benefits, for example through the spontaneous inflow of raw materials, components and machinery or the availability of workers with sector specific skills, to favour providers of specialised technical, administrative and financial services, and to create a conducive environment for the development of inter-firm co-operation as well as of co-operation among public and private institutions to promote local production, innovation and collective learning.
Consider this example…. In 2004 a developmental initiative was started at the Wet grinder cluster in Coimbatore which has over 700 small manufacturers of this product. The cluster has taken up business development initiatives like conducting buyer/seller meet throughout the country and even overseas supported by a Government grant for the purpose. The cluster has also created a common facilitation centre for manufacturing critical components, which were earlier sourced from external sources at very high rates.
Thanks to the various initiatives taken by MSME, this cluster has doubled its business to over Rs. 200 crores in the last 5 years. This is just a small example of how MSME helps small industries to come together shunning their imagined disabilities and synergize their strengths to reap the benefits of cluster development.
The cluster development program for Karur Bus Body Builders is another forceful manifestation of MSME initiative. Mr. S. Sivagnanam, Director, MSME Development Institute (MSME-DI), Chennai, said that, two years back the MSME department undertook a major initiative in identifying Clusters within Tamil Nadu and Puducherry needing developmental support.
Based on their study 148 clusters were selected from which 15 were selected as dynamic clusters. A diagnostic study was done of all these 15 clusters, the Karur Bus Body Building cluster being one among them. A detailed report was submitted to the Central Government (Ministry of MSME) recommending several Development Supports & Initiatives. Subsequently the MSME-DI actively leveraged the strengths of the Karur cluster along with initiatives from the Union and State Government, adds Mr. A. Muthuvezhappan, Assistant Director, MSME-DI.
GroupSynergy, a consulting company, whose strengths in project consultancy specially in the auto/bus industry was then appointed as the Business development service provider for the Karur CFC project to take the MSME-DI initiatives forward.
Since then a lot of work has gone into this project and a Detailed Project Report (DPR) has been prepared and submitted to the State Government and the MSME headquarters in Delhi for final approval for grant. Once the project is approved and grant received, the project should be up and running in 9 to 12 months time, says Mr. Sivagnanam.
MSME-DI monitors all the projects thus funded, for a period of 3 years by which the projects are expected to be self-sustaining.
In my opinion, this is an excellent & dedicated effort by the MSME to identify and support micro, small & medium industries with good growth potential. MSME-DI, Chennai, has indeed set a glowing example for others as to how good intentions, concerted efforts, and low inertia can really energize the hitherto skeptical micro/small industries towards their future due to tightening business environment and impact of globalization.
