MSME- The Growth Engine of New India
MSME- The Growth Engine of New India
India is expected to develop as one of the leading economies in the world over the next decade in the light of a positive legislative and economic scenario. The Micro, Small & Medium Enterprises (MSME) segment is assumed to play an important role in the emergence of the Indian economy.
The evolution of this segment is extremely crucial to meet the national imperatives of commercial inclusion and generation of vital levels of employment across urban and rural areas across the country.
MSME stands for Micro, Small and Medium Enterprise. The Micro- Small and Medium Enterprises (MSMEs) are small-sized things, defined in terms of the size of the investment. They are offering significantly to output, employment export, etc. in the economy. (1)
They perform a crucial role in the economy by providing employment to a large number of unskilled and semi-skilled people, adding to exports, raising production sector manufacturing and extending support to bigger businesses by providing raw material, primary goods, finished components, and elements, etc.
MSME or SSI enterprises are the basis of any economy and are an engine of economic growth, developing impartial improvement for all. It is the pillar of economic growth in a developing country like India. MSME sector form 8% of our countries GDP.
MSME sector needs less investment and creates huge employment opportunities for the growth of the economy. This sector of the financial economy is still facing obstacles, i.e. lack of movement of institutional credit, proper connectivity of the businesses from the market and many infrastructural issues as well. (2)
With the rise in MSME contribution to the GDP, there is a potential to improve its contribution to employment to over 50 percent over the next decade. It is also necessary for the informal MSMEs who are currently not registered want to be made part of the formal MSMEs ecosystem.
Growth influences in the form of privileges and direct benefits for the MSMEs will support registration and participation in the growth opportunity. MSME registration or SSI registration helps companies avail multiple government subsidies and benefits MSMED act. (3)
Importance of MSME registration:
Benefits from Banks: All banks and other financial institutions understand MSMEs and have created special schemes for them. This normally includes priority sector lending, which indicates that the likelihood of your business being sanctioned a loan is high, and lower bank interest rates. There may also be special treatment in case of delay in repayment.
Tax Benefits: Depending on your business, you may experience an excise exemption scheme as well as release from certain direct taxes in the first year of your business.
Benefits from State Governments: Most states offer those who’ve registered under the MSMED Act support on power, taxes, and entry to state-run industrial estates. Inappropriate, there is a sales tax release in most states and buy preference on goods produced.
Benefits from Central Government: The central government, from time to time, declares schemes to benefit MSMEs, such as the credit guarantee scheme:
Credit Guarantee Scheme (CGTMSE)- One of the major struggles that the small scale industries face is credit and input of income from various sources to support them. The Credit Guarantee scheme, proposed to support MSME, comes with modifications to make it more beneficial for small traders.
The salient features of the scheme include:
- Improving the optimal eligibility loan from Rs. 25 lakh to Rs. 50 lakh.
- Overcoming the one-time guarantee for loans availed of by the MSME in North-Eastern region of India from 1.5% to 0.75%.
- Increasing the amount of guarantee cover from 75% to 80% for:
- Women served Medium and small scale enterprises
- Micro companies, for loans up to 5 lakhs
- Loans received in the North Eastern region of the country
- Decreasing the one-time guarantee fee for all loans availed in North Eastern India from 1.5% to 0.75%. (4)
Why MSME Registration is Essential for Small-Scale Industries?
MSME enrollment is basic for the organizations, as it gets clarity and validity the working of the association. On the off chance that you are planning to begin MSME anyplace in the nation, at that point the MSME division accepted by the legislature of India will help you in the promotion of your endeavor. To profit the benefits, for example, motivators, funds, and bank advances, MSME enlistment is required.
Role of Youth in MSME:
Young people are innovative and productive in problem-solving and in finding solutions. They are the key to serving communities in meeting their subsistence needs, developing the security of the people and even taking control over their own lives. Nearly, 50% of the world’s populations are youth and kids.
There are 1.2 billion 15 to 24 year old in the world and one billion live in developing countries. Young people create a high and a peaking portion of the world’s population, they picture challenges as well as opportunities for development. The youth can lead to economic growth as well as the social development of their communities and society.
Educational institutions are necessary for developing amongst the rural areas. Graduates joining hands with MSME have the power to revolutionize the whole world. But as of now, an educated entrepreneur is very less in number, particularly in the field of engineering. Entrepreneurship is an important part of being an engineer. (5)
In general, what would you say an engineer’s weaknesses when it grows to be an entrepreneur?
Two highly considered strengths of engineers can actually grow weaknesses; intelligence and precision. Engineers are deeply intelligent and can convert frustrated when others with whom they cooperate are not as knowledgeable about their subject (entrepreneurs need to be flexible and patient).
Engineers also value precise solutions that seldom may not be deserving of the effort, time, or money required to complete (entrepreneurs sometimes need to make quick decisions and can’t pause for precise solutions). Engineers also point to devalue soft skills or visionary thinking. They may also hold change once on a given path, they want to finish something, even if it adds no more extra value. (6)
How the field of Engineering replaces Entrepreneurship?
The field of engineering is becoming more multidisciplinary. For example, Master’s in Engineering and Professional Practice (MEPP) degree trains engineering management skills such as accounting, international relations, leadership, quality management, research, and communication skills. All necessary skills for being an entrepreneur and establishing and running your own business.
Does being an Entrepreneur makes you a better Engineer?
Key features of being entrepreneurial are vision and opportunity. Being entrepreneurial enables an engineer to be more tricky in a project or in an organization. This means he or she can wear different hats and participate in multiple ways.
Being connected at multiple, cross-disciplinary levels can give an engineer a wider perspective on the ending result of the project, sometimes ending in engineering insights and decisions that improve the final product.
Although an entrepreneur is usually defined as an individual, a group or an organization can also be entrepreneurial. Just as an individual can unite other disciplines to his/her technical base, groups can do the corresponding. When individuals of various skills come together and collaborate to continue a common goal, the team can be entrepreneurial.
This is also a great time to be an entrepreneur. With the globalization of business and the possible economy, there are plenty of chances to evaluate and pursue. So, the global economy, with its chaos and confusion, is actually a target-rich condition for technology-based entrepreneurs. Identifying and vetting these opportunities, often within forced timeframes, are challenged more efficiently handled by entrepreneurial engineers. (7)
World MSME Day 2019:
As countries across the world arrive together to honor, acknowledge and celebrate World MSME Day, the important sector of the economy has its own list of requirements that it wants to be fulfilled.
The Government steadily seeks to encourage MSME manufacturers to tap businesses internationally too in order to boost the overall commodities of the country. One such effort in this direction by the government of India is the MSME Market Development Assistance Scheme-like,
- Prime Minister’s Employment Generation Programme (PMEGP),
- Credit Guarantee Trust Fund for Micro & Small Enterprises(CGT MSE).
This scheme encourages participation by manufacturing Small & Micro Enterprises in International Trade Fairs/Exhibitions under MSME India. (8)
Recent actions of the government like 59-minute loan portal, SFURTI and ASPIRE are intended at removing the hindrances in the growth of MSMEs. More still needs to be done to improve the capabilities of the sector and make things more comfortable to actually aid in India’s industrial growth.