MSMEs

MSMEs

Subject – Economy

Context – MSMEs: Engines of growth for new India

Concept –

• Worldwide, MSMEs have been accepted as the engine of economic growth and for promoting equitable development.
• They constitute over 90% of total enterprises in most of the economies and are credited with generating the highest rates of employment growth.
• In July 2020, the Union Cabinet decided to change the criterion to “annual turnover”, which was more in line with the imposition of GST.
• According to the new definition, limit of micro unit was increased to Rs. 1 crore of investment and Rs 5 crore of turnover and limit of small unit was increased to Rs. 10 crore of investment and Rs 50 crore of turnover. Similarly, the limit of a medium unit was increased to 50 crore of investment and Rs. 250 crore of turnover. 
• It may be noted that this revision was done after 14 years since the MSME Development Act came into existence in 2006.

Importance of MSMEs

• contribute around 30 per cent to India’s GDP,
• employ about 11 crore people,
• constitute nearly 40 per cent of total exports, and
• more than half of them are located in rural India,
• the government is keen to rev up this sector to achieve inclusive growth thereby attaining self-reliance (Atmanirbhar Bharat).

Schemes to promote MSME

• Special Credit Linked Capital Subsidy Scheme for the MSMEs
  • The scheme will help in meeting the technology-related requirements of enterprises in the services sector.
  • It has a provision of 25% capital subsidy for procurement of plant and machinery and service equipment through institutional credit to the Scheduled Caste – Scheduled Tribe MSMEs without any sector-specific restrictions on technology up-gradation.
• UdyamiMitraPortal : launched by SIDBI to improve accessibility of credit and handholding services to MSMEs.
• MSME Sambandh : To monitor the implementation of the public procurement from MSMEs by Central Public Sector Enterprises.
• MSME Samadhaan -MSME Delayed Payment Portal –– will empower Micro and Small entrepreneurs across the country to directly register their cases relating to delayed payments by Central Ministries/Departments/CPSEs/State Governments.
• Digital MSME Scheme : It involves usage of Cloud Computing where MSMEs use the internet to access common as well as tailor-made IT infrastructure
• Prime Minister Employment Generation Programme : It is a credit linked subsidy program under Ministry of MSME.
• Revamped Scheme of Fund for Regeneration Of Traditional Industries (SFURTI) : organizes traditional industries and artisans into clusters and make them competitive by enhancing their marketability & equipping them with improved skills.
• A Scheme for Promoting Innovation, Rural Industry & Entrepreneurship (ASPIRE) : creates new jobs & reduce unemployment, promotes entrepreneurship culture, facilitates innovative business solution etc.
• National Manufacturing Competitiveness Programme (NMCP) : to develop global competitiveness among Indian MSMEs by improving their processes, designs, technology and market access.
• Micro & Small Enterprises Cluster Development Programme (MSE-CDP) – adopts cluster development approach for enhancing the productivity and competitiveness as well as capacity building of MSEs.