A STRATEGY FOR NATIONAL DEVELOPMENT
At the recent Confederation of Indian Industry (CII) summit, Hyderabad, it has been concluded that small scale industries and businesses are facing numerous challenges. Although small in name, they generate more than 12 crore jobs nationwide.
Micro, Small & Medium Enterprises (MSME), which account for 45 percent of manufacturing and 40 percent of exports are facing many setbacks and some of them are shutting down. Small Industries Development Bank of India (SIDBI) stated that the effects of the recession are pronounced in micro industries.
The recent CII summit made an appeal to the micro-enterprises to get competitive and adapt to digital technology. Though the appeal was heartfelt, the MSME are credit-deprived and the Reserve Bank of India (RBI) confirmed the same. Without a solution to their basic problems, how can the micro-enterprises get competitive?
According to the reports, MSME needs a total credit demand of Rs 45 lakh crore over the medium term while Rs 5.15 lakh crore is needed for the near term but they are receiving only 18 percent of the required funds. In January 2018, Union Minister Piyush Goyal has urged (Public sector banks) PSBs to facilitate loans to MSME.
After Nirmala Sitharaman became the Finance Minister, she announced various fiscal stimulus packages. Consequently, bank loan melas are being conducted in 250 districts across the nation. A while ago, the banks announced that they would sanction up to Rs.1 crore loan to the micro-enterprises which registered on their portal psbloanin59minutes, but the actual figures related to that scheme has not been publicized yet.
Finance Minister Nirmala Sitharaman said that various ministries have cleared Rs 40,000 crore out of Rs 60,000 crore due, mainly to MSMEs for supply of goods and services, and that the remaining amount will be paid by the first week of October.
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How are foreign countries supporting their MSMEs
China is flooding world markets with products ranging across all categories. China opened 1,000 rural community banks over the past decade to offer basic financial services to medium and small-scale industries.
Singapore is specially equipping its small-scale industries with Cyber security.
Australian government markets and purchases surplus goods from its micro enterprises.
New Zealand gives great importance to MSME that accounts for 28 percent of their GDP.
In Germany, MSMEs (Mittelstand) account for creation of 60 percent of total nation’s employment.
Japan, which introduced fundamental acts for development of MSME five decades ago is already successful.
If the central governments goal of expanding Indian MSMEs to 50 percent from the current 29 percent, unemployment can be a thing of the past. Easing the financial challenges of Micro, Small and Medium Enterprises and empowering them with technology is a sure shot way to development.
