The Growing Role of MSMEs for Future Readiness

Micro, Small and Medium Enterprises (MSME) sector currently comprises of more than 6.30 crore enterprises, making it a powerful sector of the Indian economy, fostering entrepreneurship and generating employment opportunities at comparatively lower capital cost. 

Major Initiatives for MSMEs 

According to registrations on Udyam Registration Portal and Udyam Assist Platform (UAP), the MSME sector in India is responsible for providing employment to 24.14 crore people, a number that is expected to grow in the coming years and gradual formalisation of the sector. In this respect, a major thrust of the Government has been to formalise the sector, provide an identity to the MSME enterprises and facilitate ease of doing business. As MSMEs struggle for financial access, the Credit Guarantee Scheme for Micro and Small Enterprises approved credit worth Rs. 2.44 lakh crore last year alone and also provided 90% guarantee coverage to women entrepreneurs. 

To build capacities of MSMEs to enter the export market, the International Cooperation Scheme facilitates their participation in international exhibitions and organising conferences, seminars and buyer-seller meets. Bilateral meetings with Japan, Taiwan and United States are also dedicated to knowledge exchange, resource sharing and increased collaborations. 

The MSME Ministry has also launched initiatives like MSME – Trade Enablement and Marketing (MSME-TEAM), Yashasvini Campaign, Centre for Rural Enterprise Acceleration through Technology (CREATE), Self Reliant India Fund Scheme and more to help MSMEs with digital adaptation, better market access, skill creation and job generation, showcasing India’s commitment to enhancing the role of these industries in the economy. 

Future Readiness of MSMEs

While MSMEs are fueled to help India achieve the target of a $5 trillion economy by 2025, the future readiness is dependent on many other factors that have to be improved. 

With the acceleration of digital technologies in the post-pandemic period, MSMEs in India have to take advantage of advanced technologies for ease of operations, speedy and easy access to finance and reaching out to new markets for business expansion. It is also imperative that MSMEs make a smooth transition from offline to online, find solutions for end-to-end technology innovation and improve customer experience

For the MSME sector to become truly inclusive and future-ready, a uniform legislative and regulatory framework must be established to remove state variations and provide ease of compliance and streamlined growth across the country and not in certain pockets. 

As MSMEs form the bedrock of Ease of Doing Business, a single window approach for all approvals, promotional activities, and finance needs to be ensured in addition to reduced tax rates, removal of reverse charge mechanism, digital data sharing and relaxations in certain clauses related to business conduction. 

Another vital factor that the sector has to work on is skill development. Skill development costs and R&D set-up expenses need to be subsidized. Better training programs, upskilling and reskilling of workers and tie up with academic institutions must be the focus to enhance productivity and competitiveness on the global scale. 

Role of CII

The CII Centre of Excellence for Competitiveness of SMEs has been instrumental in enhancing the capability of Small and Medium enterprise to become world class through capacity building, training and benchmarking. 

Furthermore, the CII-Centre of Excellence for Competitiveness has also worked with MSMEs, using the cluster approach to help them meet challenges related to globalization. Initiatives like Project TechSaksham and Digital Saksham have also helped enterprises in digital adoption. 

A task force, established through the joint collaboration of CII National MSME Council and CII National PSE Council has been instrumental in enhancing market access for MSMEs. They work on building strong supply relationships between central and state public sector enterprises, providing MSMEs to work quality product manufacturing and benchmarking. 

In the present times, the future of any business lies in how it embraces innovation and adopts new-age solutions to achieve growth. Indian MSMEs are poised for significant transformation, provided they proactively address challenges and adapt swiftly to emerging opportunities.