Government of India's Measures to Support the MSME Sector

Introduction:

Micro, Small, and Medium Enterprises (MSMEs) play a vital role in India's economy, contributing to employment generation, innovation, and overall economic growth. Recognizing the significance of the MSME sector, the Government of India has implemented several measures to provide support, encouragement, and growth opportunities for MSMEs across the country. These initiatives aim to enhance competitiveness, facilitate access to finance, promote technology adoption, and streamline regulatory processes. This article highlights some of the key measures taken by the Government of India to support the MSME sector. In 2023 and beyond, which is also termed- Amrit Kaal, by the Prime Minister, the Indian MSMEs are likely to witness several opportunities. One of the biggest opportunities lies in the digital transformation of businesses. The pandemic has accelerated the adoption of digital technologies, and MSMEs can leverage this trend to reach new customer

Financial Assistance and Credit Availability:

To address the funding challenges faced by MSMEs, the government has introduced various financial assistance schemes and initiatives. The most notable among them is the "Pradhan Mantri Mudra Yojana," which provides collateral-free loans to micro and small enterprises. Additionally, the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) scheme encourages lending institutions to provide credit without collateral or third-party guarantees to eligible MSMEs. The government has also launched the "Interest Subvention Scheme" to provide interest rate concessions on loans availed by MSMEs.

Table : Contribution of Indian MSME

Sector In Indian Economhy

 

Sector	%
GDP	29
Industrial Output	45
Exports	40

 

Technology Upgradation and Innovation:

The government has recognized the importance of technology adoption and innovation for the growth and competitiveness of MSMEs. The "Technology Upgradation Fund Scheme" (TUFS) provides financial assistance to MSMEs for the modernization of their machinery and technology. The government has also established various technology centers and incubation centers across the country to support MSMEs in research, development, and innovation. These centers offer training, mentoring, and infrastructure support to foster innovation and improve productivity.

Ease of Doing Business:

Simplifying regulatory procedures and reducing bureaucratic hurdles is a crucial aspect of supporting MSMEs. The government has undertaken significant measures to enhance the ease of doing business for MSMEs. The introduction of the online Udyog Aadhaar registration system has streamlined the process of obtaining a unique identification number for MSMEs, enabling them to avail various benefits and incentives. The implementation of the Goods and Services Tax (GST) has simplified the taxation system, reducing compliance burdens for MSMEs. Furthermore, the introduction of the "Saksham" portal enables MSMEs to access various government schemes, benefits, and marketplaces through a single window.

Market Access and Export Promotion:

To promote market access and encourage MSMEs to participate in global trade, the government has launched several initiatives. The "Public Procurement Policy for Micro and Small Enterprises" mandates a certain percentage of government procurement to be sourced from MSMEs. The government has also established the "Trade Related Entrepreneurship Assistance and Development" (TREAD) scheme, which provides financial and developmental support to women entrepreneurs in the MSME sector. Additionally, the "National Small Industries Corporation" (NSIC) assists MSMEs in obtaining technology, marketing, and export-related support.

Skill Development and Capacity Building:

The government recognizes the need to enhance the skill set of MSME entrepreneurs and workers. The "Skill India" initiative aims to provide training and skill development programs for the workforce in the MSME sector. The Ministry of Micro, Small and Medium Enterprises (MSME) has established various Entrepreneurship Development Institutes (EDIs) and tool rooms to provide training, skill development, and capacity-building programs for MSMEs.

Micro and Small Enterprises Cluster Development Programme (MSE-CDP): This scheme aims to promote the development of the MSME clusters by providing support for infrastructure development, technology upgradation, and market access.

 Digital MSME Scheme: This scheme aims to encourage the adoption of digital technologies by the MSMEs by providing support for the development of digital infrastructure, capacity building, and digital marketing.

National Manufacturing Competitiveness Programme (NMCP): This scheme aims to enhance the competitiveness of the manufacturing sector, including the MSMEs, by providing support for the technology. upgradation, quality certification, marketing assistance, and skill development.

National Skill Development Corporation (NSDC): This scheme aims to provide skill development training to the MSME workforce so as to enhance their employability and

Conclusion:

The Government of India has implemented a range of measures to provide comprehensive support to the MSME sector. These initiatives encompass financial assistance, technology upgradation, ease of doing business, market access, and skill development. By addressing key challenges faced by MSMEs and creating an enabling ecosystem, the government aims to foster the growth of this sector to harness its maximum potential. 

Note :  Above text has been compiled from various sources available online and Yojana Magzine April Issue pg 43