CLUSTERS IN ONE WORLD PERSPECTIVES FROM MANY NATIONS Sharing Experience of Indian States

1. CLUSTERS IN ONE WORLDPERSPECTIVES FROM MANY NATIONSSharing Experience of Indian States M. PRABHU. Additional Director (MSME) Department of Industries & Commerce KARNATAKA

2. KARNATAKA FIRST ON MANY FRONTS • Karnataka stands first on many fronts in the Indl Dev. • Department of I & C completes 100 years in 2013. • First Economic Summit held during 1911 resolved to establish Department of I & C. • Sir M. Visveswaraya, a pioneer of Indian Industry, was instrumental. • Industrial Development started prior to Indian Independence.

3. Industry growth rate – Karnataka and India

4. Industrial Scenario in Karnataka • More than 90 Fortune 500 companies. • Over 700 Multi National companies. • IT sector has more than 2000 IT companies • Karnataka has about 1000 Large & Medium Industries • More than 187 biotech companies are in Karnataka which is over 70% of India’s biotechnology companies. • More than 4.8 Lakh MSME’s employing more than 3 million persons.

5. Industrial Scenario in Karnataka • Major PSU’s HAL, HMT, BEL, BEML, BHEL, Railways Wheel & Axel Plant. • HGML, MML, KS&DL, VISL, MPM & KAVIKA etc. • Karnataka is 3rd in terms of FDI inflows in India. • Karnataka takes the First Rank in Software Exports. • Karnataka is the hub of Bio-Technology Industrial base. • Karnataka’s contribution in Aerospace and Aircraft production contributes 25% of India’s production.

6. A Few initiatives for inclusive development • Sector Specific Investment Promotional Policies like • Agro Food Processing Policy. • IT & BT Policy. • Mineral Policy. • Aerospace Policy. • Textile Policy. • Semi Conductor Policy.

7. A Few initiatives for inclusive development • Karnataka first state to introduce Industrial Facilitation Act. • 3 Tier Project Approval Mechanism • District Level, • State Level, • High Level Clearance Committee. • E- filing of applications & weekly review by Chief Secretary.

8. Cluster Development • Exclusive Integrated Scheme “MSE-CDP”. • Excellent Package right from Identification to commencement. • Diagnostic Study Report (Grant of Rs. 2.50 lakhs). • Soft Intervention (Grant of Rs. 25.00 lakhs - 75% for others & 90% grant for Micro, Women & SC/ST groups). • DPR (Grant of Rs. 5.00 lakhs). • Hard Intervention for CFC (Rs. 15.00 Cr. Grant of 70% for others &90% Grant for Micro, Women and SC/ST. • Infrastructure Development (Rs. 10.00 Cr Grant of 60% for others & 80% for Micro, Women and SC/ST groups.

9. Karnataka initiatives • Exclusive State Funded Organization Karnataka Council for Technological Up Gradation ( K C T U ). • Expert Panel of Consultants. • More than 200 clusters identified. • Established 2 Major Clusters. • Machine Tools at B’lore (Rs. 30.00 cr.). • Foundry Industry at Belgaum (Rs. 25.00 cr). • DPR approved for 10 proposals. • 6 under implementation.

10. Identified clusters • Electronics, Sheet Metal, CNC, Wood Treatment, Packaging, Machine Tools, Printing, Jewellery, Furniture, Granites, Powder coating, Food Cluster, Puffed Rice, Coffee Processing, Wine production, Textile, Jeans, Power Looms, Silk Reeling, Cotton Ginning and Processing, Garments, Embroidery, Aerospace, Jaggery, Rice Mill, Cashew processing, Leather Products, Plastic, Oil Refinery, Auto Cluster, Bidri Craft, Fabrication, Dry Grapes, Woolen Products, Coir products, Stone Carving and Jelly Crushing etc.

11. constraints • Trust building among members. • Initial funds mobilization. • Training in Up gradation of Technology. • Land & Infra at affordable cost. • Difficulty in achieving economy of scale of production. Inadequate Resource for Raw Material, Machinery, Consultancy Services & Market Opportunities. • Inadequate Resources for Training, Logistics, Market Intelligence, Technology & Process Innovation. • Lack of co-ordination, inconsistency in operation.

12. Unido approach • HORIZONTAL NETWORK. • Networking of Partners of Cluster in Promotional & Motivational Activities. • Networking of activities in strategic planning. • Set up Pilot Projects to promote Trust. • Set up Strategic Projects to boost production levels. • Education in self management.

13. Unido approach • VERTICAL NETWORK. • Evaluation of current and potential suppliers of Raw material, Machinery components. • Continuous dialogue with the clients and supplier firms. • Analysis of present Technology and explore new innovations to improve productivity, reduce cost of production and reduce wastage. • Integrated future plans for sustainable and continuous growth.

14. Strategies for successful clusters • Need to conduct case studies of under performing clusters to know process deficits, product quality, managerial & technical skills. • Training of cluster brokers as resource persons for identified activities. • Reading Manuals & Video discs as tools. • Adopt local Development Methodology. • Manual on Network Promotion.

15. Strategies for successful clusters • Joint Learning Programmes. • Business Advisory services & Business Incubators. • Promote Rural Entrepreneurship. • Partnership Programme. • Policy Frame work for SME- Clusters. • States can have policy for Participatory Approach and provide incentives for DSR, Soft Intervention, DPR, Hard Intervention & Infra Development.

16. Possibilities of co-operation. • Collaboration with Banks & MSME Associations. • Infra Dev. Agencies like Indl Area Dev. Board to adopt 5 clusters in each district. • NABARD, SIDBI to adopt Participatory Approach. • More Project Management Agencies. • More Rural Infra Promotion Programs on Employment Opportunities. • Provide Marketing Opportunities.

17. THANQ