On International MSME Day, 2023, the Indian Ministry of Micro, Small & Medium Enterprises (MSME) celebrated the event, ‘Udyami Bharat-MSME Day,’ to promote the growth and development of MSMEs. The Union Minister for MSME introduced several initiatives including the ‘CHAMPIONS 2.0 Portal’, ‘Mobile App for Geo-tagging of Cluster Projects and Technology Centers’, and ‘MSME Idea Hackathon 3.0’ for women entrepreneurs.
The International MSME Day and Its Significance
The International MSME Day is observed annually on June 27th. It serves as a reminder of the crucial role MSMEs play in economies worldwide, including India. In 2023, the theme for MSME Day in India was “Future-ready MSMEs for India@100.” Simultaneously, the Global Council for the Promotion of International Trade followed the theme “Building a Stronger Future Together,” launching the #Brand10000MSMEs Network. The United Nations designated this day in April 2017 to recognize the potential MSMEs have in achieving Sustainable Development Goals.
Key Highlights of the Udyami Bharat-MSME Day
Several initiatives were launched during the event. The ‘CHAMPIONS 2.0 Portal’ was introduced to support MSMEs by providing services like mentoring, capacity building, market access, and grievance redressal. There was also a mobile app for geo-tagging of cluster projects and technology centers launched to improve efficiency and tracking. Lastly, to encourage innovation and provide a platform for entrepreneurial ideas amongst women, the ‘MSME Idea Hackathon 3.0’ was announced.
Understanding the Importance of MSME
MSMEs, the backbone of the Indian economy, significantly contribute to employment generation, industrial production, and overall economic growth. These enterprises are involved in the production, manufacturing, processing, or preservation of goods and commodities, and are classified into micro, small, and medium categories based on their investment in plant and machinery or equipment and their annual turnover.
Significance of MSME Sector Globally and in India
Globally, MSMEs account for up to 90% of businesses, over 60% to 70% of jobs worldwide, and half of the global GDP. In India, these entities have contributed towards industrialization in rural areas, provided significant employment, and played a pivotal role in the Government’s ‘Make in India’ mission. Moreover, with 45% of India’s manufactured goods produced by MSMSs, they are key drivers of economic growth and export leverage.
Challenges Faced by MSMEs
Despite their significance, MSMEs face challenges such as limited access to formal finance and credit facilities, lack of technological advancements, difficulty in complying with complex regulatory processes, and a shortage of skilled labor. They also struggle with market fluctuations, a lack of awareness about government support programs, and competition from large-scale enterprises.
Recent Government Initiatives for MSMEs
To support the MSME sector, the government has launched several initiatives, including the Raising and Accelerating MSME Performance (RAMP) Scheme, Interest Subsidy Eligibility Certificate (ISEC), and a Scheme for Promoting Innovation, Rural Industry & Entrepreneurship (ASPIRE). The Credit Linked Capital Subsidy for Technology Upgradation (CLCSS), and Zero Defect & Zero Effect (ZED) have also been introduced.
Suggestions for the Way Forward
Potential strategies for overcoming obstacles in the MSME sector include strengthening financial inclusion, enhancing skill development initiatives, and simplifying regulatory processes. Investing in infrastructure development, promoting digitalization, and developing risk mitigation strategies can also help. Furthermore, awareness campaigns regarding government schemes and support programs would be beneficial.
Understanding Government Policies through UPSC Questions
Understanding government policies for promoting the growth of the manufacturing sector and MSMEs can be elucidated through previous years’ questions from the UPSC Civil Services Examination, such as the ones provided above, providing a deeper insight into these topics.
