MSMEs, abbreviated for Micro, Small and Medium Enterprises has emerged as a spine in the development of India. In accordance with Micro, Small and Medium Enterprises Development (MSMED) Act, 2006, MSME are classified into two classes:
1. Manufacturing Enterprises: The Manufacturing Enterprises are defined in terms of investment in Machinery, Plant as a value addition to the final product.
2. Services Enterprise: The enterprise which renders service as in benefiting the end user comes under the roof of Services Enterprise.
United Nations Industrial Development Organization in its report said that MSMEs contributes to higher productivity with little investment on resources. This would succor the unemployment and would dagger the Demographic Explosion in many parts of India. Seeds of ‘’Inclusive Growth’’ and ‘’Sustainable Development’’ has been sown in India which has started bearing fruits of innovation, manufacturing, nurturing young talents, encouraging entrepreneurs etc. Undoubtedly MSMEs can be said as a grand, fearless and hubris in Indian Economy.
It gives me immense pleasure to be a part of CoreEL Technologies for receiving the CII Industrial Innovation Award 2015 for India’s most Innovative Company in MSME Manufacturing Sector and one of the Top Twenty Innovative companies in India. It really is a matter of great pride for all CoreELites.
Why MSME in India?
In Ancient and Medieval past, Indian peninsula had suffered many invasions. Why invaders invaded the Golden Bird for their grotesque? Why did Indian stoop when the enemies kept their swords shinny?
Answers to these vitriolic questions can be found in Economy. Basis of any country or state is economy. Without economy there is no existence of a state or a country. With increasing demographics and searing natural phenomenon, there came a plethora of destruction amongst the masses. What would they do without their home, without their family, without their beloved ones, without source of income and where would they go. There came the need to annex the neighbors so as to grab their produce, land and valuables so that they can survive.
In a similar way, if we consider the present India, there is a rift between the rich and the poor.
Rich are becoming richer and poor becoming poorer. We need to ponder on the probable causes and brain map them. There is no suitable and sustainable source of income for the poor. Hence, no ‘’Inclusive Economic Growth and Sustainable Development’’ has been achieved till date in India.
Government initiatives like ‘’Make in India”, ‘’Pradhan Mantri Gram Kausal Yojana’’ etc. have poised itself in the immense hard rock of Gibraltar (difficulties, no technical education etc.).
Here comes the role of MSMEs. It provided jobs and technical awareness to the masses in a wide domain of electronics, automobile, manufacturing, textiles etc. It is also providing affordable technologies and diverting labor forces from unproductive work to productive enterprises. According to the latest survey conducted by the Government of India, MSMEs contributes to 10% of country’s GDP, 45% of manufacturing output and 40% of its exports.
It has helped India to grow, to curb unemployment in rural and urban India and enhancing the knowledge and capability of Indians. MSMEs have become an important ingredient of the local economic eco-system where the masses live in an eco-tone.
MSMEs are also assisting Indian Government’s Aerospace and Defense organizations like DRDO, ISRO, HAL etc. to fulfill their needs and showcase the superiority of India to the entire world and thwart our citizens from any possible foments from our enemies. MSMEs are also helping in Women Empowerment and the lower caste population which will lead to ‘’Inclusive Development’’. MSMEs are the leaders in manufacturing and exports, making the roaring lion of ‘’Make in India.’’
Issues and Strategic Action Plans:
1. Central and State Governments to work in a conformity with RBI. It needs to encourage and train young entrepreneurs and enrich them with various skills at Skill Development Centers. Hence would also be a pioneer for ‘’Make in India‘’ initiative.
2. Lack in finance can be resolved by Jan Dhan Yojana which can be used to fulfill the monetary and other financial requirements of the MSMEs. Role of NGOs could be very fruitful.
3. There must be a cap on rate of interest charged by the banks which provides loans to the MSMEs and the entrepreneurs. This initiative has been taken in Japan has shown grandiose results.
4. Co-ordination of different government departments to encourage MSMEs by helping in Research and Development, Skill Development, Information Technology support etc.
5. Lack of managerial, experience and specialist skills which can be thrown out by Governments’ Skill Development Centers.
6. To invoke confidence, government can strengthen the legal structure and establish a credible redressal mechanism.
7. Subsidies, direct or indirect to be given to entrepreneurs to encourage and promote them. Not to forget the subsidies given by World Trade Organization in form of Amber, Yellow and Green boxes.
In a nut shell, MSMEs have emerged as an engine of growth in Indian Economy. It is a vibrant and dynamic component of economy with a significant contribution to GDP, employment generation, making young population self reliable, skill development, women empowerment and boosting the economic sector in India.
MSMEs need to be completely aware of the various government initiatives and correctly utilize these to their benefits. Government schemes should be monitored and effectively modified to suit the need of the present MSME sector. MSMEs should be properly groomed and empowered to increase the economic efficiency. Amidst a belligerent system, in order to make a mark and shine in entire world, we Indians have a ray of hope in the name of Micro Small and Medium Enterprises (MSMEs). It would be absolutely correct to say with fair and square that MSMEs are the Grandiose Intrepid of Indian Economy.
Author: Sunny Kumar, Application Engineer at CoreEL