The Micro, Small and Medium Enterprises (MSMEs) sector in India have done well in a buoyant economy. India is poised to emerge as one of the leading economies of the world and it is projected to be the second largest by 2050. The MSME sector is considered the backbone of Indian economy with a contribution of 38% to India’s GDP, 40% share of exports and 37% share of the manufacturing output, apart from it employing almost 120 million across the country. It is well understood that the MSME will play a crucial role in furthering growth, innovation, and commerce in India. A major thrust, is consequently, is the need of the hour to strengthen it and make it well equipped to steer the country towards growth.
2017 saw developments in the country and outside that would have major significance in the trajectory of MSME growth. The launch of the Goods & Services Tax was a major game changer and is expected to benefit MSMEs not only with simpler tax structure but also with aspects such as improved technology adoption in order to comply with GST system. Secondly, the government has also announced major sops to address the credit paucity for MSMEs by doubling their credit guarantee cover from Rs. 1 crore to Rs. 2 crores and enhancing their cash credit limit from 20% to 25%. Further, the government’s focus on digitalization of business processes and regulations through self-attestation and certifications, single window clearance, online approvals, etc will further strengthen the MSME sector. Another significant move is the Zero Effect Zero Defect Scheme launched by the Prime Minister, Mr. Narendra Modi to promote manufacturing excellence amongst MSMEs while minimizing the adverse effect on the environment.
Other major developments comprise of the launch of the National SC/ST Hub for building the capacity and enhancing the market linkages of the underprivileged sections of society, the Insolvency and Bankruptcy Code, and labor market reforms. The Ministry has also launched the MSME Databank in order to create an online repository of MSMEs in India and their various products and services. Moreover, the initiatives undertaken by CII have been able to affect a tangible change in the MSME ecosystem in the country. CII is aimed at working synergistically with the government and actively champion the cause of a robust MSME sector in India through its ongoing and upcoming initiatives. A technologically vibrant and internationally competitive SME sector is what the sector will strive to achieve thus sustaining its contribution to the national income, employment and exports.