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  • 20 July, 2021

  • 15 Min Read

Initiatives for MSME sector in India

Initiatives for the MSME sector in India

  • The Ministry of MSME implements various schemes and programmes for the growth and development of the MSME Sector in the country.
  • These schemes and programmes include the Prime Minister’s Employment Generation programme (PMEGP), Scheme of Fund for Regeneration of Traditional Industries (SFURTI), A Scheme for Promoting Innovation, Rural Industry & Entrepreneurship (ASPIRE), Interest Subvention Scheme for Incremental Credit to MSMEs, Credit Guarantee Scheme for Micro and Small Enterprises, Micro and Small Enterprises Cluster Development Programme (MSE-CDP), Credit Linked Capital Subsidy and Technology Upgradation Scheme (CLCS-TUS).

Revamped Scheme of Fund for Regeneration of Traditional Industries (SFURTI)

  • Ministry of MSME is implementing it.
  • For regeneration of traditional industries clusters from khadi, village and coir sectors. The scheme envisages a needs-based assistance.
  • To organize traditional industries and artisans into clusters to make them competitive.
  • Provide employment for traditional industry artisans and rural entrepreneurs.
  • Increase marketability of products and clusters for new products, design, packaging etc.
  • Improve skills, common facilities, strengthen cluster governance systems, etc.

A Scheme for promoting Innovation, Rural Industry & Entrepreneurship (ASPIRE)

  • Objectives
    1. Promotion of Innovation, Entrepreneurship and Agro-Industry organisation. Create new jobs.
    2. Boost Grassroots economic development at the district level.
    3. Promote innovation to strengthen the competitiveness of the MSME sector.
  • NSIC/KVIC or Coir Board or any Center/ State agency to set up 80 Livelihood Business Incubators (LBI) for 2014 to 2016.
  • Fund: 1 time grant of 100% of cost of Plant & Machinery other than the land and infrastructure, or an amount up to Rs 1 crore, whichever is less.

Post Covid-19, Government has taken a number of initiatives under AatmaNirbhar Bharat Abhiyan to support the MSME Sector in the country, especially in the Covid-19 pandemic. Some of them are:

  • Rs 20,000 crore Subordinate Debt for MSMEs.
  • Rs. 3 lakh crores Collateral free Automatic Loans for business, including MSMEs.
  • Rs. 50,000 crore equity infusion through MSME Fund of Funds.
  • Newly revised criteria for the classification of MSMEs.
  • New Registration of MSMEs through 'Udyam Registration' for Ease of Doing Business.
  • No global tenders for procurement up to Rs. 200 crores, this will help MSME.
  • An online Portal “Champions” has been launched on 01.06.2020. This covers many aspects of e-governance including grievance redressal and handholding of MSMEs. Through the portal, total of 35,361 grievances have been redressed up to 12.07.2021.
  • Studies have been conducted by National Small Industries Corporation (NSIC) and Khadi and Village Industries Commission (KVIC) to assess the impact of the COVID-19 Pandemic on MSMEs including units set up under the Prime Minister’s Employment Generation Programme (PMEGP).

The main findings of the online study conducted by NSIC to understand the operational capabilities and difficulties faced by the beneficiaries of NSIC schemes amid the Covid-19 pandemic are as follows:

  • 91% of MSMEs were found to be functional.
  • The five most critical problems faced by MSMEs were identified as Liquidity (55% units), Fresh Orders (17% units), Labour (9% units), Logistics (12% units) and availability of Raw Material (8% units.)

The findings of the study conducted by KVIC are as under:

  • 88% of the beneficiaries of PMEGP scheme reported that they were negatively affected due to Covid-19 while the remaining 12% stated that they were benefitted during Covid-19 Pandemic.
  • Among the 88% who were affected, 57% stated that their units were shut down for some time during this period, while 30% reported a drop in production and revenue.
  • Among the 12% who had benefitted, 65% stated that their business increased as they had units in the retail and health sector and around 25% stated that their units benefitted as they were dealing with essential commodities or services.
  • On the question of regular payment of salaries to the employees, around 46.60% respondents stated that they had paid the salaries in full, 42.54% reported to have partially paid and 10.86% reported to have not paid salary for some time during this period.
  • Majority of the beneficiaries expressed the need for additional financial support, relaxation of waiver of interest and marketing support for their products.
  • The Government of India has announced Fund of Funds with the nomenclature Self Reliant India (SRI) Fund to infuse Rs. 50,000 crores as equity funding in those MSMEs which have the potential and viability to grow and become large units. Under this scheme total size of the fund of Rs. 50,000 Crore has a provision of Rs.10,000 Crore from the Government of India and Rs.40,000 Crore leverage through Private Equity / Venture Capital funds.

Source: PIB

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