Micro, small and medium enterprises (MSME’s) are an essential sector of the Indian economy. MSME’s are enterprises which are engaged in the production, processing, preservation and manufacturing of goods. The MSME sector is often called the backbone of the Indian economy.
“As India moves further to become a global economic power, the contribution of MSME’s to the Indian GDP becomes even more central. The Indian government aims to increase the contribution of MSME’s to from almost 30% to 40% by the year 2025. While this might seem like an enormous task, I think we can achieve it if different sectors work together. Our government, financial institutions and banks will have to offer their support to MSME’s in order to help uplift India’s economy.”, the entrepreneur says.
Mr. Ramesh Chaurasia believes that MSME’s are responsible for promoting entrepreneurship among people and generate employment for millions of people. They are called the pillars of the Indian economy for a reason.
He believes that a growth rate of 10% would be required to reach the target. Unfortunately, this would not be possible without the contribution and support of the government and the banking sector. Although lending to MSME’s is considered to be high risk, bankers will have to provide the necessary resources to them.
We asked the visionary about the steps being taken by the government and MSME’s at present.
The entrepreneur says, “I am really glad that the government is working to digitalise the whole system of MSME administration so that it can be made quicker, result based and more transparent. The implementation of cluster-based technology along with training and research on what MSMEs are doing in various countries can also be a game changer for entrepreneurs. The right use of technology can also enable the use of e-marketplaces and digitalization in various processes.”
There are various schemes started by the government under the Micro, Small and Medium Enterprises Development act, 2006.
Gram Udyog Vikas Yojna – This is one of the schemes which are aimed to encourage village cottage industries like pottery making, bee keeping and incense making etc.
Prime Minister Employment Generation Program (PMEGP) – It is a bank driven scheme which is basically a credit linked subsidy program launched in order to generate more employment in rural and urban areas. Under this scheme, beneficiaries can get subsidies up to 35% of the total cost of the project.
Another useful scheme is the interest subvention scheme which is aimed to reduce the interest rate by up to 2% for legal MSME’s. “I think that our nation is one with the greatest potential. With the largest youngest population in the whole world, we can surely become an economic superpower with the right steps and strategies. The best thing we can do is work together and find ways to innovate MSME businesses with the use of technology. We need centralized and accessible training programmes to achieve collective technological advancement. Digitalization can offer the boost required to scale up MSME’s and the manufacturing process and more.”, Ramesh Chaurasia suggests ways to boost the contribution of MSME’s to India’s GDP, wrapping up the discussion on a positive and hopeful note.
