The micro, small and medium enterprises (MSMEs) in India are the levers of economic growth. This sector houses immense potential and talent, employing 11.7 crore people, constituting 40 percent of the workforce.
With the potential of creating 10 million new jobs over the next four to five years, it is one of the largest centers in the world after China. As the government is aggressively channelizing its energy to increase MSME’s share of 29% to 50% percent, it all boils down to how each institution and organization is contributing to this development.
There have been multiple factors that have led MSMEs to trail behind - lack of adequate credit facilities, limited awareness, increasing competition, lack of access to markets, limited knowledge of technology, lack of skilled human resources, lengthy documentation process, procurement cost, and insufficient infrastructure. However, Hon’ble Prime Minister Shri Narendra Modi’s mission of making India a $5-trillion economy and a global powerhouse by 2024-2025, has led to massive development in the MSME sector.
Shri Nitin Gadkari, Minister of MSME offers some realistic actions that can make the Indian MSMEs globally competitive - encourage collaborative partnerships, reduce the cost of capital, logistics, and power, integrated development of rural and agro-based enterprises along with urban-based enterprises, revival and development of cottage, textile, bamboo, bio, dairy, food processing, fishery, honey, transport industries, and incentivizing entrepreneurs.
Dr. (Prof.) Mahadeo Jaiswal, Director IIM Sambalpur shares "To achieve the vision of our Hon’ble Prime Minister of creating a 5 trillion-dollar economy, we must realize that it cannot be created by 50 companies alone. But if 1 million SMEs can create 1-100 million dollars each, they can create a more than 5 trillion-dollar economy. Every household and every village should create businesses and that is the model of education we are fostering. This is also the reason why we are working very closely with the SME sector. We have signed MOUs with MSME and India SME Forum as we believe this is a sector we should refocus on and create more businesses and turn everyone into entrepreneurs along with innovation.”
The pandemic has indeed made one thing clear - DIGITAL IS THE WAY FORWARD. For MSMEs to keep up with the pace, they must embrace digital technology and bring out a hybrid working model to achieve unrivaled growth in the times to come. Infusing entrepreneurial skills in the youth of today will further help in strengthening this sector. Also, if planning and innovation are backed by adequate credit facilities, MSMEs’ can become frontrunners in ensuring India’s economic growth. Only 50 lakh people out of 5.1 crore small enterprises are currently enjoying bank credit facilities. The rest of the people still rely on personal borrows where interest rates are skyrocketing.
The allocation of INR 15,700 crore in the Budget 2021, will help the MSME sector strengthen its base; huge emphasis has been given to infrastructure, digital, and capacity building which all routes to encouraging more investment, enhancing credit facility, and supporting Atma Nirbhar Bharat.
To sum it up, new partnerships and collaborations with foreign firms for expansion, having more IT and skill development centers for employee training, and incubation centers for promoting entrepreneurs, making the most of data and new technologies, building superior user experience by proper trade facilitation infrastructure and policies, improved infrastructure and investments are factors that can strengthen the MSME sector and help achieve the $5-Trillion Economy.