Union Minister for Micro, Small and Medium Enterprises Jitan Ram Manjhi has had an extensive political career, including serving as the 23rd chief minister of Bihar from 20 May 2014 to 22 February 2015.

He is also the founder of Hindustani Awam Morcha (HAM). Previously, he had served as minister for scheduled castes and scheduled tribes’ welfare in Nitish Kumar’s cabinet. With his vast experience and dedication to public service, the HAM chief continues to make significant contribution to India’s political landscape. In an interview with Nikhil Vyas of The Statesman, Manjhi (79) gets candid about the MSME sector and ways to strengthen it. Excerpts:

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Q: How significant is the role of the MSME sector in India in terms of its contribution to GDP, exports and employment opportunities for the new generation?

A: The micro, small, and medium enterprises (MSMEs) sector holds immense significance in India, far surpassing large industries in employment generation and economic contribution. While there are around 25,000 large industries across the country, they employ fewer people compared to the millions engaged in the MSME sector, which collectively employs about 60 million people. This sector contributes significantly to India’s GDP, accounting for 30 per cent of productivity. Despite this, considering India’s 1.4 billion population, there is a need to employ at least 800-900 million people to improve the conditions for the poor. Our focus is on promoting MSMEs to achieve this employment target. Historically, India thrived on local industries, with artisans and diverse rural enterprises sustaining livelihoods. While the government’s efforts continue, achieving a balanced livelihood for rural communities relies heavily on supporting small enterprises through training and financial assistance. We need to re-embrace the rural culture rather than adopt the market culture.

Q: What are the key challenges in achieving the goal of contributing 50 per cent to India’s GDP, and transitioning into a developed country?

A: Our government aims for MSMEs to contribute 50 per cent to India’s GDP and envisions a developed nation status by 2047. Prime Minister Narendra Modi’s focus on promoting khadi, coir, and village industries underscores commitment to empowering rural areas, making production cost-effective and enhancing local availability of goods. By meeting local needs effectively, India will bolster its capabilities, laying the groundwork for realizing the vision of becoming a developed nation by 2047.

Q: If our goal is to promote such enterprises, how can we tailor our focus to support each category individually? What is your perspective on nurturing the ecosystem for new entrepreneurs?

A: No one has paid so much attention to this sector in the past. However, no work is small. It is crucial to promote and support MSMEs individually. Today, they need financial support, training, and increased visibility. It is crucial to engage youth in small and medium enterprises. The motto “Transform agriculture into industry, prioritize selfemployment over dependency” should guide our path forward. While many prioritize traditional jobs, even small-capital ventures are worthwhile. The prime minister’s focus on rural areas has led to the establishment of many technical and cluster centers, or development commissionaires aimed at promoting business in villages. Institutions such as KVIC (Khadi and Village Industries Commission), coir industry, and NSIC (National Small Industries Corporation) have been set up to facilitate the establishment of small industries. These initiatives have accelerated industrial growth in rural areas, actively promoting and supporting small and medium-scale enterprises.

Q: How do you plan to prioritize innovation, new technology and exports in this sector? What steps will you take to enhance capacity building for the future?

A: Despite technological advances, many people still prefer handmade clothes, which are often cheaper to stitch in villages than in cities. Thus, it is crucial to focus on skill development in rural areas. In the context of Skill India, our nation already possesses significant skills, minimizing the need for extensive learning from other countries. While promoting technology remains crucial, reviving traditional skills prevalent in villages is equally important. For instance, transitioning to compost manure instead of chemical fertilizers can enhance the overall health of our country. The coir industry, for example, presents vast opportunities, with a substantial market for products made from coconut shells.

Q: What are the next steps regarding central schemes such as Mudra loan, Credit Guarantee Scheme, PM Vishwakarma and the recently launched TEAM scheme?

A: Our commitment is to support banks while tackling issues such as corruption within larger institutions. Despite these challenges, the government ensures timely subsidies, although there may be delays of two to four months. To address this, we are increasingly involving self-help groups, where millions of women are actively participating. These groups, typically consisting of 100-200 members, pool small amounts of capital and offer loans ranging from Rs 10,000 to Rs 20,000, which are repaid within the group. This model has proven highly successful. Our priority is to ensure that micro and small industry groups derive maximum benefit from the government without external dependencies. Similar to agricultural credit cards, we are exploring the concept of MSME cards. These cards would enable automatic loan approvals when cardholders approach banks. This initiative aims to reduce reliance on traditional banking channels.

Q: Many entrepreneurs migrate to other states in search of better facilities. What strategies do you propose to prevent this migration?

A: The ministry of MSME plans to establish technical centres across the country. However, issues arise in some states like West Bengal, where obtaining land becomes complicated due to bureaucratic hurdles. In such cases, we consider relocating these centres to more cooperative states to ensure smooth implementation. It is essential to have harmony between state and central governments for the advancement of MSMEs. Currently, there is an imbalance in MSME development, with more progress seen in south India compared to north India. This issue requires political foresight and dialogue with state leadership. For instance, concerns have been raised about the effectiveness of MSME initiatives in states like Odisha. Our approach is guided by the belief that leadership should ensure equitable development across all states. We are committed to learning and adopting strategies — be it through financial support, establishing cluster centres, or engaging in public-private partnerships (PPPs) — to foster MSME growth nationwide.