Mumbai: Micro, small and medium enterprises have a great role in economic development of the country as they are both employer- and employment-friendly, prime minister Manmohan Singh told a gathering at the presentation of the National Awards to micro, small and medium enterprises (MSMEs) in New Delhi.

He said MSMEs have a very important role to play in ensuring that the process of economic growth in our country is inclusive, employment-friendly and that they contribute to greater regional balance in levels of development.

''The enactment of the Micro, Small and Medium Enterprises Development Act, amendments to the Khadi and Village Industries Commission Act, announcement of a comprehensive package for promotion of micro and small enterprises and setting up of a National Commission for Enterprises in the Unorganised Sector have all helped in strengthening this important sector and creating the national awareness about its growing importance in our national economic life,'' the prime minister said.

He said the National Manufacturing Competitiveness Programme is helping tiny and small scale units in micro and medium enterprises to graduate to bigger enterprises and in the process strengthening the industrial base of the economy.

''Experience during the past decade has amply demonstrated that this sector can not only survive competition, but can also grow faster than the overall manufacturing sector. This demonstrates the high degree of resilience, entrepreneurial skills and the capacity for adaptation of people operating in this important sector,'' the prime minister said.

The MSMEs provide employment to over 42 million people in the country. It contributes about 45 per cent of the total manufacturing output and nearly 40 per cent of the country's exports. It is the capacity of this sector to generate economic activity at the local level that prompted Gandhiji to give the pride of place to Khadi, the prime minister said.

The ministry of MSME is conducting a number of programmes for skill development through its national level entrepreneurship development institutes, MSME-development institutes, tool rooms and training centres, he said.

These impart training in the skills to nearly two lakh persons annually but we need to scale up this effort in a big way. To provide handholding support to the trained persons in setting up their own enterprises, the ministry has also launched a new scheme, namely, Rajiv Gandhi Udyami Mitra Yojana, he added.

The government, he said, has targeted imparting technical training to 500 million people, under the National Action for Skill Development, by the year 2020.

For this, he said, the centre has also written to the state 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 of the youth.

In addition to creating employment, the MSME sector also provides vital components and accessories to the large manufacturing sector. In this way it contributes significantly to the process of rapid industrialisation. This sector has shown continued dynamism in terms of growth in the number of enterprises, production, and the capacity to contribute to manufacturing output and exports. There were apprehensions about the impact of liberalisation on the growth of this sector, he pointed out.

The government has launched a census of MSMEs in a bid to capture comprehensive data for the sector. The census, the fourth such, would collect detailed information on all relevant parameters pertaining to this sector, including khadi and village industries and coir industries.

The government, meanwhile, has 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.

Ank credit to small industries has more than doubled from Rs67,000 crore to Rs1,48,000 crore since 2005, he said, adding, the Credit Guarantee Fund for Micro and Small Enterprises has so far approved over one lakh proposals under the credit guarantee scheme.