MSME

Micro, Small and Medium Enterprises (MSMEs)

The role of MSMEs in the economic and social development of a country is well recognized. They meet the country’s objectives of balanced growth, poverty alleviation, equity and inclusion. They are nurseries of entrepreneurship.

MSMEs:

-       contribute 8% of India’s GDP

-       contribute 45% of manufactured output

-       contributes 40% of total exports

-       employs nearly 7 crore people – about 10% of India’s working population  [employment generation in MSME was higher in 1970s when small units were sheltered from competition, and more items were reserved for exclusive production in MSME. Thus some analysts suggest that these policies should be continued] 4

-       55% of MSME enterprises are in 6 States- Uttar Pradesh, Maharashtra, Tamil Nadu,  West Bengal, Andhra Pradesh and Karnataka. [Nonetheless the geographic distribution of the MSMEs is more even than bigger industries.]

-       about 7% of MSMEs are owned by women

-       MSMEs in the country manufacture over 6,000 products. Some of the major subsectors in terms of manufacturing output are food products (18.97%), textiles and readymade garments (14.05%), basic metal (8.81%), chemical and chemical products (7.55%), metal products (7.52%), machinery and equipments (6.35%), transport equipments (4.5%), rubber and plastic products (3.9%), furniture (2.62%), paper and paper products (2.03%) and leather and leather products (1.98%).

[Info from: PMs Taskforce on MSME Report, Jan 2010]

There is considerable segmentation among the MSMEs in terms of their size, and needs tailor made policies for each class. The MSME sector can be divided into the organized sector (6%) and the unorganized sector (94%).


Highly innovative and high growth enterprises: These include MSMEs in sectors like textiles and garments, leather and leather products, auto components, drugs and pharmaceuticals, food processing, IT hardware and electronics, paper, chemicals and petrochemicals, telecom equipment, etc. Such enterprises not only have high potential for growth but could also contribute significantly in enhancing country’s exports. Important Constraints they face:

1.    Negligible access to equity capital- Suitable incentives to MSME need to be provided like focused angel/venture capital funds, and SME Exchanges/platforms. 

2.    Difficulties in investing in research and acquiring latest technologies due to high costs. The Government has launched the National Manufacturing Competitiveness Programme with the objective of enhancing the competitiveness of MSMEs- through imparting knowledge and skill about quality management standards, quality technology tools, design clinics.

At the other end of the MSME spectrum is the unorganized sector. Herein:

-        enterprises are typically established through own funds or funds obtained through non-institutional sources (moneylenders).

-       lack managerial bandwidth,

-       do not have established channels for marketing and

-       are centered around a single traditional technology. 

The policies and programmes for the micro and small enterprises in the unorganized sector would need to address their survival strategies and should be in the direction of providing livelihood alternatives such as social security, skill formation and credit. Further MSMEs in the unorganised sector should be facilitated to progressively integrate with the organized sector.

Constraints:

-       Shortage of capital, particularly working capital, is the major problem faced by the enterprises in the unorganized sector. This is because banks do not have enough information about the various sectors and its potential, and the loan-seekers lack reliable credit history.

-       Seasonality of markets is another major problem faced by them.

-       Lack of technology upgradation: market uncertainties and lack of information have resulted in poor adoption of even the available technologies

GOI has been deliberating over problems of MSME sector [Prime Minister’s MSME Taskforce Report 2010] and has proposed the following measures to address the above constraints:

-       Credit:

o   MFIs: Government should encourage Micro Finance Institutions (MFIs) to form self-help groups and finance micro enterprises in unbanked rural/semiurban areas.

o   MSMEs declared priority sector for lending.  A Credit Guarantee Trust Fund for Micro and Small Enterprises Scheme has been launched by GOI to provide adequate safety net to the Banks who lend to MSME.

o   Banks may also formulate schemes for refinancing loans taken by the MSEs from non-institutional sources/moneylenders.

o   Financial outreach is likely to prove an effective means to formalize the unorganized sector.

-       Skill Building and Technology upgradation:

o   National Skill Development Mission

o   Encourage partnership between the industry and academic institutions for research and development.

o   Promotion of sub-contracting:  has helped in providing marketing linkages, and also resulted in technological linkages through provision of product specification and design.

-       Social Security: The social security aspects relating to the unorganized sector have been sought to be addressed by the Unorganised Workers Social Security Act, 2008 (UWSSA).

-       Infrastructure: New clusters for MSEs should be created to meet the requirements of planned development and growth,

-       Incentivize the transition of MSMEs from the unorganized to the organized sector as well as for their corporatization as entities.

-      Proposed Direct Tax Code and GST should work to facilitate growth of MSMEs- by graded corporate tax structure, tax rebates for venture capital funds and incentives for R&D.

1.     http://msme.gov.in/welcome.html

2.     http://msme.gov.in/PM_MSME_Task_Force_Jan2010.pdf

3.     http://smetimes.tradeindia.com/smetimes/news/top-stories/2011/Jul/28/branding-important-to-promote-msmes-experts50014.html

4.     http://economictimes.indiatimes.com/policy/favourable-policies-will-give-msmes-their-rightful-place-as-economys-engine/articleshow/9391318.cms

Temple-Architectural Styles of India

Dravida style of Architecture-

-       Developed during the Chola Empire, between 9^th–12^th Century AD, in S. India (Tamil Nadu, NW Karnataka).

-       Main feature of this style:

o   Vimana: were multiple storeys built above the garbhagriha (chief diety’s room). Number of storeys varied from 5-7.

o   Mandapa: a pillared hall with elaborately carved pillars and a flat roof was placed before the diety’s room. It acted as an audience hall which featured ceremonial dances too (by devadasis).

o   Circular passage around the garbhagriha to allow devotees to do pradakshina.

o   Courtyard and Gopuram: Entire structure was enclosed within a courtyard surrounded by high walls. This courtyard would have high gates to allow passage of people. Gates called gopuram

o   With time, the vimanas rose higher, number of courtyards increased and gopurams became more elaborate.  The temple became a miniature city with priests living in it. The temples enjoyed revenue grants for their upkeep.

         -       Examples of Dravida style

o   Rajarajeshwara / Brihadishvara temple at Tanjhavur –built in 1010 AD – by Rajaraja. Temple was named after the kings because Cholas had a practice of installing images of kings and queens in the temples (in addition to the diety).

o   Temple at Gangaikondacholapuram

o   Kailasanatha Temple at Kanchipuram- 8^th century

 [Visit http://www.wayfaring.info/2011/04/08/brihadeshwara-temple/ to see pics of Brihadishwara temple. The first picture shows clearly the vimana and mandapam. The second pic shows the gopuram (gate).]

Chalukyan style of temple architecture

After the fall of the Chola empire, temple-building activity continued under the Chalukyas and Hoysalas (Belur). The main feature of Chalukyan style is that “apart from the gods and their attendants, the temples contain finely sculptured panels showing a busy panorama of social life, dance,war, love etc. For the common man, the temple was not  just a place of worship but the hub of social and cultural life as well. Art of sculpture attained a high standard during this period.

            Best example is Hoysaleshwara Temple at Belur (Karnataka). Photo below is one of the several panels at the temple depicting daily life.

                                                                     Copyright: Spurthi Reddy.

Nagara style of temple architecture

-       Found in N.India and Deccan. Prevalent between 8^th and 12^th Century.    

-       Features:

o   Tall curved spiral roof over the garbhagriha

o   Manadapa was added sometimes.

-       Khajuraho temples (MP) [image: http://tourist-book.blogspot.com/2011/01/khajuraho-temples-ancient-city-of.html]

-       Lingaraja temple- 11^th Century (Bhubaneshwar)

-       Sun Temple of Konark – 13^th Century

-       Jagannatha temple at Puri.

Reference: NCERT, 'Medieval India'  textbook.

UN Decade on Biodiversity 2011-2020

UN Decade on Biodiversity 2011-2020

The United Nations General Assembly declared the period 2011-2020 to be “the United Nations Decade on Biodiversity,with a view of:

       a)    raising global awareness about biodiversity,

       b)    its value to human well-being and

       c)    the ways that individuals and societies can change their behaviour to become more sustainable.6

The United Nations Decade on Biodiversity will build on the achievements of the celebration of the 2010 International Year of Biodiversity.

“We have all heard of the web of life.  We risk trapping ourselves in a web of death.  The United Nations Decade on Biodiversity is an opportunity to reverse this trend.”

                                                                        (UN Secretary General, Mr. Ban Ki-Moon)

The Decade will be a vehicle to support and promote implementation of the objectives of the Strategic Plan for Biodiversity and the Aichi Biodiversity Targets.7 The Strategic Plan for Biodiversity and the Aichi Biodiversity Targets were accepted at the 10^th Conference of Parties to the Convention on Biological Diversity (CBD), held in Nagoya (Japan). Another important outcome of the 10^th COP was the adoption of the Nagoya Protocol on Access and Benefit Sharing. [See end of article for notes on Aichi Biodiversity Targets and Nagoya Protocol]

India has offered to host the 11th Conference of Parties on the CBD in 2012 (October). Marine Biodiversity is the theme of the 2012 summit.5

2012 will be a very important year for the international green community as it will mark the 20th anniversary of the:

1. Rio Conference on Environment and Development (Earth Summit);

2. Adoption of the Convention on Biological Diversity (UNCBD) and;

3. the United Nations Framework Convention on Climate Change (UNFCCC).

The 11th COP summit will also include a review of the post-2010 biodiversity conservation targets, the revised strategic plan of the UNCBD, and the international agreement on access and benefit-sharing (Nagoya Protocol). 

Related Notes:

INDIA:

India is among the 17 mega-diverse countries that are custodian of 70 per cent of the world’s biodiversity. It is home to the three of the 34 “global biodiversity hotspots”- Western Ghats, Eastern Himalayas, and Indo-Burma.Biodiversity hotspots are biologically rich areas facing severe conservation threats.

India’s biodiversity is of immense economic, ecological, social and cultural value and its potential future value is far greater. The ecosystem services from the forested watersheds of two major mountain chains -- the Himalayas and the Western Ghats -- indirectly support several million people and non-timber forest products alone have been estimated to be worth $200 million a year.

Then Environment Minister Jairam Ramesh noted that reverence for biodiversity is deeply embedded in Indian culture, tradition and ethos which embody the timeless Sanskrit saying “Vasudhaiva Kutumbakam” (“Earth is one family”).

The Convention on Biological Diversity (CBD)

-       Opened for signature at the Earth Summit in Rio de Janeiro in 1992.

-       CBD is an international treaty for the:

o    conservation of biodiversity,

o   the sustainable use of the components of biodiversity and

o   the equitable sharing of the benefits derived from the use of genetic resources.

-       With 193 Parties, the Convention has near universal participation among countries.

-       The Convention seeks to address all threats to biodiversity and ecosystem services (including climate change), through

o    scientific assessments,

o   the transfer of technologies and

o   active involvement of all relevant stakeholders including local communities, youth, NGOs, women and the business community.

-       Cartagena Protocol on Biosafety, a supplementary treaty to the Convention, seeks to protect biological diversity from the potential risks posed by living modified organisms resulting from modern biotechnology. 159 countries and the European Union have ratified the Protocol (as of July 2011).

 Aichi Biodiversity Targets 4: comprise a set of 20 targets, organized under 5 strategic goals, to be achieved from 2011-2020.

Goal A: Address the underlying causes of biodiversity loss by mainstreaming biodiversity across government and society

Target: By 2020, biodiversity values should be integrated into national and local development, poverty reduction strategies, planning and accounting processes.

Goal B: Reduce pressures on biodiversity and promote sustainable use 

Target: By 2020, the rate of loss of all natural habitats, is at least halved and where feasible brought close to zero.

Goal C: To improve the status of biodiversity by safeguarding ecosystems, species and genetic diversity 

Target: By 2020 the extinction of known threatened species has been prevented.

Goal D: Enhance the benefits to all from biodiversity and ecosystem services 

Target: By 2015, the Nagoya Protocol on Access to Genetic Resources and the Fair and Equitable Sharing of Benefits Arising from their Utilization is in force and operational, consistent with national legislation.

Goal E: Enhance implementation through participatory planning, knowledge management and capacity building

Target: By 2020, knowledge, the science base and technologies relating to biodiversity are improved, widely shared and applied.

Nagoya Protocol on Access and Benefit Sharing 8

-       a protocol to the CBD adopted at the 10^th COP in Nagoya (Japan)

-       full name: Nagoya Protocol on Access to Genetic Resources and the Fair and   Equitable Sharing of Benefits Arising from their Utilization

-       The fair and equitable sharing of the benefits arising out of the utilization of genetic resources is one of the three objectives of the Convention on Biological Diversity. 

References:

1.    http://www.deccanherald.com/content/33633/india-host-2012-biodiversity-summit.html

2.    http://www.cbd.int/doc/press/2011/pr-2011-05-20-idb2012-en.pdf

3.    http://www.cbd.int/sp/

4.    http://www.cbd.int/sp/targets/#GoalC

5.    http://www.cbd.int/doc/press/2011/pr-2011-05-23-undb-asia-pacific-en.pdf

6.    http://www.cbd.int/2011-2020/goals/

7.    http://www.cbd.int/undb/doc/undb-strategy-en.pdf

8.    http://www.cbd.int/abs/

Bersih Movement (Malaysia)

Bersih, meaning clean elections, an electoral reforms movement has garnered thousands of supporters in Malaysia. They demanded reforms in an electoral system, which is widely believed to be rigged in support of the ruling coalition (the predominant political party, United Malays National Organization has held power in coalition since Malaysia’s independence in 1957). Peaceful protests were staged in July 2011, but they were met with massive force by the govt, and thousands of protestors were arrested.

The govt crackdown has only served to alienate more people and support for the opposition parties is growing. However this movement is showing signs of deepening ethnic divides in Malaysia. This is because the present govt’s policies have largely benefitted the ethnic Malays (bumiputra-sons of the soil) to the detriment of other groups like Chinese and Indian (non-bumiputra). As this movement intensifies, the more the incumbent govt relies on the Malays and the more this alienates the others- reinforcing the ethnic divide further.

Reference: http://blogs.cfr.org/asia/2011/07/14/malaysia%E2%80%99s-bersih-movement/

Controversies in the South-China Sea

The South China is bordered by China, Vietnam, Malaysia, Indonesia, Brunei, Philippines and Taiwan. The sea holds important shipping routes and possible oil and gas reserves. Because of its strategic importance and unconfirmed riches, maritime border disputes abound. All have competing territorial claims, with China claiming almost the entire sea. Skirmishes have risen to a pitch in 2011. Vietnam and Philippines have carried out naval exercises to demonstrate their  strength to China and that they wont be intimidated by Chinese might. [Arms and defense purchases made by them is to maintain some balance vis-à-vis China].

The smaller countries are all wary of China and very conscious of its growing military might. Therefore stress has been laid on negotiating with it. These countries have sought to negotiate under the aegis of the ASEAN as this gives them a better bargaining pitch. China on the other hand favours bilateral negotiations of sovereignty disputes (which wouldn’t be a favourable to the others as it weakens them before a power who is crucial to their economies). China has declared this sea as a “core national interest”-  this term has been used for Tibet and Taiwan- meaning that China will not humour any questioning or softening of its policy on the issue.

ASEAN negotiations with China over the South-China Sea have been ongoing for some time. In the past decade China in its bid to strengthen economic linkages with ASEAN played down its claim on the sea. It was during this time that the ‘Declaration on the Conduct of Parties in the South China Sea’ 2002 was signed, which has not been very successfully implemented. However China’s assertion to the sea has increased in the past year. Now (in July 2011) ASEAN is deliberating to evolve a “code of conduct” (in the South China Sea), which can then be negotiated with China.

However tensions are not confined to China and its neighbours. China and the US too have had skirmishes over territory violations. The US insists that this sea should be an open waterway, open to international navigation. Additionally the smaller ASEAN countries have sought US to put pressure on China to resolve these disputed through dialogue and not hegemony. The US concurs with the ASEAN view of resolving disputes through dialogue. Further, Vietnam is seeking closer military cooperation with US to balance out China; the US has stationed the ‘Seventh Fleet’ (a naval fleet) in the area. The ASEAN countries have made it clear that they want the US to continue its presence in the South China Sea and many see it as a reliable mediator. All this has displeased the Chinese who don’t want US involvement (refer South China Sea as ‘core national interest’).

Nonetheless analysts feel that ASEAN is not powerless before China. Throughout the last decade China has invested in building trade ties with south-east Asia, and convincing its leaders that China is not a threat. With the China-ASEAN FTA, their economies are  more integrated with ASEAN being China’s 3-largest trading partner. China and ASEAN share cultural ties.  All this is not something China would want to risk damaging. Thus ASEAN nations do have leveraging power and resolution of these disputes amicably is the only solution.

On another note, analysts are avidly watching China’s actions in this dispute as a indicator of how it behaves as an emerging super-power. For instance, while China invokes sovereign rights and claims, US and other countries raise the issue of international rights (open waterway). So  “quite apart from Beijing’s sovereignty claims to the sea, how China speaks and acts with respect to these issues—rights of passage, freedom of navigation, interpretations of customary international law—will deeply affect perceptions of its exercise of power. Secondly the South China Sea is also perceived as a ‘global common’ and by insisting that it is a bilateral issue, China is negating this aspect. Thus as China assumes greater power and say on the international stage, its attitude on this issue is likely to shape perceptions of its attitude towards global commons, and public goods”5, and consequently is it acts as a responsible super-power.

India and South-China Sea: Since India has important relations with all the involved parties it has to walk a tightrope. In an ASEAN ministerial meeting held in 2010, India reiterated the importance of dialogue and called the 2002 Agreement as a landmark one. India is hoping that the tensions will be reduced soon and dialogue started.

On another note, India is wary of China’s growing military might and is developing its military and naval capabilities. The aim is to solidify its position in the Indian Ocean and project power in the Asia-Pacific.

Also, “India is pursuing better ties with Vietnam to try to check Chinese naval influence and access to the Indian Ocean. New Delhi initiated a new security partnership with Hanoi in 2000 that emphasized defence training, supply of advanced weaponry, and the potential for India to gain access to the South China Sea through the Cam Ranh Bay naval and air base. Indian officials have long understood the importance of Vietnam in the South China Sea and its potential to balance the Chinese naval presence in the Indian Ocean. The Vietnamese have demurred on granting India access to Cam Ranh Bay, and the Vietnamese–Indian security partnership remains limited.”8

References

     1.      http://news.bbc.co.uk/2/hi/asia-pacific/7941425.stm

2.      http://www.bbc.co.uk/news/world-asia-pacific-11152948

3.    http://www.cfr.org/china/regional-turbulence-over-south-china-sea/p25319

4.    http://www.cfr.org/china/avoiding-tempest-south-china-sea/p22858

5.    http://blogs.cfr.org/asia/2010/08/13/chinas-rise-and-the-contested-commons/

6.    http://articles.economictimes.indiatimes.com/2011-07-09/news/29755879_1_south-china-sea-spratly-islands-paracel

7.    http://oilandglory.foreignpolicy.com/category/wordpress_tag/south_china_sea

8.    http://blogs.reuters.com/india-expertzone/2011/07/19/the-china-challenge-a-strategic-vision-for-u-s-india-relations/

Difference between Signing and Ratifying Treaties

Signing means a country promises not to undertake any action that defeats the Convention's goals.
Ratifying means a country consents to be legally bound by the Convention's provisions.

2011 World’s Failed States Index

[prepared by Fund for Peace and Foreign Policy]

Critical states

1.    Somalia (No.1 spot for 4 years in a row)

2.    Chad

3.    Sudan

4.    Dem. Rep. of Congo

5.    Haiti

6.    Zimbabwe

7.    Afghanistan

8.    Iraq

12. Pakistan (dubbed most dangerous country in Washington policy circles but danger to its     

      own people)

18. Myanmar

In Danger

25. Bangladesh (extreme poverty and fighting environment crisis-if sea-level rise by 1 

       metre,17% of country could get submerged) 

27. Nepal (poorest country in S.Asia, and status unlikely to change unless pease process is 

      implemented)

29. Sri Lanka (widescale displacement -over 3 lakh- in the offensive against LTTE)

      50. Bhutan

Borderline

   76. India

Failed States have been identified as the “main security challenge of our time” (Robert Gates, Pentagon, US).  State-failure poses a threat to:

-        international security, as is best evidenced by the increasing piracy activities in Somalia or more dramatically the 9/11 attacks launched from Afghanistan,

-       threat to its own people –

o   high risk of internal conflict, civil violence, and humanitarian catastrophe (both natural and man-made) - settings for the worst human rights abuses – most UN peacekeeping interventions - endure gender discrimination

o   the overwhelming source of the world's refugees.

o   suffer low or negative economic growth, populations poor and malnourished; lack access to education, basic health care, and modern technology; and die young or suffer chronic illness

-       Threat to neighboring states - violent conflict, refugee flows, arms trafficking, and disease are rarely contained within national borders (eg: Afghanistan and Pakistan, Rwandan Genocide’s affects on the Great Lakes region)  

Points to Note:

-       Such troubles do not automatically endanger the wider world much. What happens in failed states often stays in failed states. Transnational threats are more likely to emanate from better-performing developing countries that are more closely integrated into the global economy but nevertheless possess significant governance gaps. Eg: Pakistan, Kenya, Yemen

-       Transnational crime like drug-trade requires perpetrators to stay close to global markets and gain from infrastructure like modern telecom, transportation, banking etc that are lacking in failed states. This explains the emergence of Mexico and South Africa as hotbeds of criminal activities.

-       Global health pandemics have largely arisen from developed/developing states and bypassed the most failed states. What is dangerous here was the obstructionist attitude and denial by some countries to deal with them. Eg South Africa denied the HIV problem for years, China-SARS and Indonesia-the bird-flu pandemics.

-     India is surrounded on all sides by failed states whose governance institutions are faltering to various degrees.

Thus, as the failed states have been considered an international security challenge, they should even more be considered a ‘development challenge’ (Zoellick, World Bank President).

Summarised from: Stewart Patrick, “The Brutal Truth”, Foreign Policy Jul/Aug 2011. http://www.foreignpolicy.com/articles/2011/06/20/the_brutal_truth?page=0,0

- http://www.deccanherald.com/content/170416/indias-neighbours-most-failed-states.html