By – Neha Agrawal
Public Relations and Communication Strategist
Founder, MensenTock Communication
Despite the COVID-19 outbreak and the ensuing lockdown that halted the Indian economy for a brief while in 2020, the outlook for the Indian economy has never been brighter with estimates pegging GDP to grow by 11% in fiscal year 2021-22. This growth is estimated based on several macro-economic factors and efforts taken by the Government of India (GoI) to bolster the manufacturing and services sector in the country. As part of its ‘Atmanirbhar Bharat Abhiyaan’ campaign, the GoI intends to spur the Indian economy with quantum jumps rather than incremental changes; all leading towards self-reliance for its citizens and the nation at large.
A key element in the vision of making India self-reliant, is the resurgent Micro Small and Medium Enterprises (MSME) sector which had already seen a stellar 18.5% Y-o-Y growth in registered units; from 21.21 lakh in 2019 to 25.13 lakh units by the end of 2020. Despite this growth in registered units, it must be noted that India is home to an estimated 6.3 crore MSMEs and together they account for nearly 29% of the country’s GDP. The MSME sector is thus clearly a major contributor to the socio-economic development of the country and has been instrumental in entrepreneurship development, especially in semi-urban and rural areas. Despite this, the lack of technology-based production activities and low investment in R&D has been major bottlenecks hindering growth of this sector. Additionally, with India reeling under the impact of the 2nd COVID-19 wave, it has become paramount that domestic businesses be provided strong financial stimulus along with concessional working capital loans to ensure adequate liquidity for sustaining and expanding their operations.
Recognizing the above immediate needs, the Ministry of MSME has envisaged and implemented noteworthy schemes such as the Prime Minister’s Employment Generation Programme and the Credit Linked Capital Subsidy Scheme designed to provide credit and financial assistance to registered entities. Additionally, the Ministry has provided for enhancing skill development and training through schemes such as ASPIRE-A Scheme for Promotion of Innovation, Rural Industry & Entrepreneurship and the Entrepreneurship and Skill Development Programme (ESDP) while infrastructure development schemes like the Scheme of Fund for Regeneration of Traditional Industries (SFURTI) and Scheme for Micro & Small Enterprises Cluster Development Programme (MSE–CDP) aim to support these MSME Entrepreneurs to scale their businesses further. To encourage local production, the government is working on policies to increase MSME exports and has sanctioned Rs. 200 crore to set up 12 technology centres across the country with an expected timeline of completion by 2021.
The above measures and investments made in providing the latest back-end technological services will improve the competitiveness and quality of manufactured products and services offered by the units in India’s MSME Sector. Policy makers and experts are confident that the Manufacturing units in this sector will establish themselves as key suppliers of goods and services to big industrial enterprises that are currently dependent on imports, largely from countries like China. This will go a long way in reducing our reliance on imports and will eventually lead to India being a net-exporter of manufactured goods and services. In order to increase the reach of the MSME Sector within the country and international markets, the GoI is encouraging them to market their products on e-commerce sites; especially through the Government e-Marketplace (GeM) which is the source of procurement for the various Ministries and PSUs. This online push will help these entities to leverage the cost and technological benefits to a larger audience, leading to an expansion of the sector and the GDP contributed by it.
By facilitating an increase in both national and international trade of the enterprises in the MSME sector, the GoI is betting that they will play a pivotal role in India’s growth story ahead. It would only be fair to summarize that on the back of the various measures undertaken, an ever-expanding base of units engaged in the MSME sector and a favourable business environment; India is truly on the path of self-reliance and progressing towards a US$ 5 trillion Indian economy by 2025.
(The article is written by Neha Agrawal, Founder, MensenTock Communication – an Integrated Marketing and Global Brand Communications Advisory and Consulting Firm. The views expressed are independent views of the writer.)