Steps for Development of MSMEs

The Micro, Small and Medium Enterprises have been gaining momentum in past few years. Government at various levels, the MSME Ministry, Public Sector Banks, and NBFCs among other state agencies have been implementing several initiatives for the development of the sector and encourage more and more people to establish their businesses in the MSME sector. The sector did suffer owing to the coronavirus outbreak and the subsequent lockdown, which lead to curb on all the economic activities across the country. However, the various micro, small and medium enterprises are now on the path of revival and will soon bloom to its full potential soon again. Union Budget 2021: Here Is What the First Paperless Budget Has In Store for the MSME Sector.

Addressing the 185th Foundation Day Celebration of Bombay Chamber of Commerce and Industry, Governor of the Reserve Bank of India Shaktikanta Das said that the Micro, Small and Medium Enterprises (MSME) sector has emerged as the growth engine of the economy and is showing signs of revival after the COVID-led degrowth in early part of the current financial year (2020-21). Das added that the sector has been rendered vulnerable by the pandemic necessitating concerted effected effects to combat the stress and focus on the revival of the sector.

He informed that MSME sector -a vast network of around 6.33 Crore enterprises- is contributing about 30 per cent of the nominal Gross Domestic Product (GDP) of the country and 48 per cent to the total exports of India. “As digital capabilities improve and connectivity becomes omnipresent technological innovation and technology-driven revolution are poised to quickly and radically change India’s economy,”said Das. Adding that the Reserve Bank of India has also made necessary intervention to support economy’s critical sector- referring to the micro, small and medium enterprises. Major Boost to MSME Sector: Govt Trying to Make 5,000 MSME Clusters Under SFURTI Initiate, Says Union Minister Nitin Gadkari.

Meanwhile, the central government on its end has also been contributing towards the development of the MSME sector. In the Union Budget for the upcoming financial year 2021-22, Finance Minister Nirmala Sitharaman has proposed an allocation of a fund of over Rs 15,000 Crore to the Micro, Small and Medium Enterprises, which stands at double the amount apportioned to the sector last fiscal. A reduction in the custom duties has also been proposed, with duties on semis, flat, and long products of non-alloy, alloy, and stainless steels has been reduced to 7.5 per cent uniformly.

In an attempt to boost the Micro, Small and Medium Enterprises, Union MSME Minister Nitin Gadkari has inaugurated 50 artisan-based Scheme of Fund for Regeneration of Traditional Industries (SFURTI) clusters across over 18 States. At its launch the MSME Minister also said the central government is making efforts to establish at least five thousand MSME clusters under the SFURTI scheme. For the development of these clusters, the MSME Ministry spearheaded by Nitin Gadkari has funded Rs 85 Crore. Under the scheme, various small and medium scale traditional industries and artisans into clusters with the aim to improve their earnings and make them more competitive. MSME Credit Moves Towards Pre-Pandemic Levels, Witnesses a Growth of 5.7%: Report.

Gadkari also informed that the ministry is trying to fast track the approval process for the clusters, adding that these clusters would be helpful to farmers and craftspeople be independent. The clusters under the SFURTI scheme offers various programmes for the development of MSMEs including skill development, capacity building, creation of facilities such as common facility centres, rehousing facilities and marketing and e-commerce assistance to local industries. Indian SMEs Plan To Expand Businesses As Economy Revives, Restoration of Business Activities Likely To Gain Momentum Post COVID-19 Era: Survey.

Through these clusters more than 42 thousand artisans have been ensured continuous support and assistance in the traditional segments of muslin, khadi, coir, handicraft, handlooms, wood craft, leather, pottery, carpet weaving, bamboo, agro processing, tea and others. The SFURTI clusters have been inaugurated in several states including Andhra Pradesh, Arunachal Pradesh, Assam, Chhattisgarh, Gujarat, Haryana, Jharkhand, Karnataka, Kerala, Madhya Pradesh, Maharashtra, Manipur, Nagaland, Odisha, Rajasthan, Tamil Nadu, Uttar Pradesh and West Bengal.

So far as many as 371 such clusters have been funded by the government under the Scheme of Fund for Regeneration of Traditional Industries initiative. A total of Rs 888 Crore have been spend for its development by the centre. Nitin Gadkari also said that the government is looking to increase the share of MSME sector in the country’s GDP to 40 per cent from the current 30 per cent and share of exports to about 60 per cent from 48 per cent.