Every year on 27th June, the world recognizes Micro, Small and Medium-sized Enterprises (MSMEs) Day. This day is dedicated to celebrating the contributions these industries have made towards achieving the Sustainable Development Goals (SDGs).
The Origin of MSMEs Day
The United Nations (UN) marked 27th June as MSME Day, with a resolution passed in the UN General Assembly in April 2017. In May 2017, a program called ‘Enhancing National Capacities for Unleashing Full Potentials of MSMEs in Achieving the SDGs in Developing Countries’ was unveiled. This program was funded by the 2030 Agenda for Sustainable Development Sub-Fund of the United Nations Peace and Development Fund.
Standing Against the Pandemic: The Role of MSMEs
An International Trade Centre survey revealed that around 62% of women-led small businesses were profoundly affected by the Covid-19 crisis. These firms were 27% more likely not to survive the pandemic compared to those led by men. However, with MSMEs constituting over 90% of all firms and accounting for 70% of total employment and 50% of GDP, they remain crucial players in achieving a green recovery.
The theme for MSME 2021 has been identified as ‘Key to an inclusive and sustainable recovery’.
MSMEs and the Indian Economy
In India, MSMEs have proven to be growth accelerators, contributing about 30% to the country’s GDP. As a critical part of the supply chain, these enterprises account for approximately 48% of total exports. With nearly 110 million people employed by MSMEs across the nation, they play a substantial role in job creation. Interestingly, a significant number of MSMEs operate in rural India, linking them intrinsically to rural economies.
Government Involvement: Initiatives to Promote MSMEs
The Indian Ministry of Micro, Small & Medium Enterprises envisions a dynamic MSME sector. They aim to spur the growth and development of the industry, including Khadi, Village, and Coir Industries. Policies like the MSMED Act (2006) and programs such as Prime Minister’s Employment Generation programme (PMEGP), a credit-linked subsidy scheme, have been implemented to foster this growth.
Sustaining Traditional Industries and Fostering Innovation
The government has introduced schemes like SFURTI and ASPIRE to organize artisans and traditional industries and promote innovation and entrepreneurship. These initiatives provide financial assistance to make these businesses competitive and support start-ups in the agro-based industry.
Aiding the MSMEs: Various Interest Subvention and Credit Guarantee Schemes
The Reserve Bank of India introduced an Interest Subvention Scheme for Incremental Credit for MSMEs, offering relief of up to 2% of interest on their outstanding loans. The Credit Guarantee Scheme for Micro and Small Enterprises aims to facilitate an easy flow of credit by providing a guarantee cover for collateral-free credit extended to MSMEs.
Boosting Productivity With Technology Upgradation and Cluster Development
Schemes like MSE-CDP and CLCS-TUS aim to increase productivity and competitiveness of MSEs and also to facilitate technology upgradation. The CLCSS offers a 15% capital subsidy for the purchase of plant and machinery.
Supporting MSMEs with CHAMPIONS Portal, Samadhan, and Sambandh
Portals like CHAMPIONS, which aim to solve grievances and support MSMEs, and Samadhan, which enables direct registration of cases about delayed payments, have been established. Sambandh, a Public Procurement Portal, monitors the implementation of public procurement from MSEs. The Udyam Registrations Portal assists the government in gathering data on the number of MSMEs in the country.
