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Day 43 – Q 2. What are the pressing challenges faced by the MSME sector in India? What recent measures have been taken by the government to strengthen the MSMEs? Discuss. (10 Marks)

  • IASbaba
  • March 14, 2022
  • 0
GS 3, Indian Economy
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2. What are the pressing challenges faced by the MSME sector in India? What recent measures have been taken by the government to strengthen the MSMEs? Discuss. (10 Marks)

भारत में एमएसएमई क्षेत्र के सामने कौनसी दबावपूर्ण चुनौतियाँ हैं? एमएसएमई को मजबूत करने के लिए सरकार द्वारा हाल ही में क्या उपाय किए गए हैं? चर्चा करें।

Approach 

Students are expected to write about the MSME and challenges faced by the sector as question demands also write about recent measures taken by government to solve problems. 

Introduction 

Micro small and medium enterprises (MSMEs) have always been vital in the socio-Economic development of India. Spread across both urban and rural areas, MSMEs Produce a diverse range of products and services and provide large-scale employment at low capital cost. 

Body

  • MSME sector is facing challenges and does not get the required support from the concerned Government Departments, Banks, Financial Institutions and Corporates which is proving to be a hurdle in the growth path of the MSMEs.
  • Limited capital and knowledge and non-availability of suitable technology are few critical issues in this sector.
  • Ineffective marketing strategy, Constraints on modernization & expansions and non-availability of skilled labour at affordable cost are few other concerns surrounding the sector.
  • India’s formal MSME involves a regulatory burden of 60,000+ compliance items, 3,300+ annual filings, and 6,000 changes every year.

Measures:

  • Credit Guarantee Scheme for Micro & Small Enterprises (CGTMSE): The scheme aims at motivating first generation entrepreneurs towards self-employment by providing credit guarantee funding for third-party guarantee-free / collateral free loans.
  • Atma-nirbhar Bharat Abhiyaan:  Rs 3 lakh crore collateral-free automatic loans for MSMEs. Rs 50,000 crore equity infusion through MSME Fund of Funds. 
  • Udyami Mitra Portal: launched by SIDBI to improve accessibility of credit and handholding services to MSMEs.
  • MSME Sambandh: To monitor the implementation of the public procurement from MSMEs by Central Public Sector Enterprises.
  • MSME Samadhaan: MSME Delayed Payment Portal –– will empower Micro and Small entrepreneurs across the country to directly register their cases relating to delayed payments by Central Ministries/Departments/CPSEs/State Governments.

Conclusion

This scheme will bring a positive impact on the economy and will mitigate the distress caused by the Corona pandemic. Further to make it more impactful the government and RBI should work together to address the issues highlighted by the msme sector for better uptake of the scheme across the sector.

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