India’s MSME Plan: The Government of India, in collaboration with the Ministry of MSME and NITI Aayog, is striving to make Indian micro, small, and medium enterprises (MSMEs) strong at the global level like Germany. The government wants MSMEs to become a part of the global supply chain so that their share in exports increases. A concrete strategy is being prepared for this, which will give Indian MSMEs a new identity on the global platform.
Special focus on medium enterprises
In the budget presented last month, it was announced to make MSMEs a global supply chain. Keeping this in mind, a framework is being prepared specifically for medium enterprises. MSMEs contribute 55 percent to Germany’s GDP, while MSMEs contribute about 30 percent to Indian GDP. To bridge this gap, the government is laying special emphasis on technology and credit reform.
Indian MSMEs lag in terms of technology
Experts say that Germany is an economy based on MSMEs and this has been possible due to the increasing use of technology in MSMEs. Indian MSMEs are still far behind European countries in the use of technology. Therefore, Niti Aayog is conducting a comprehensive survey regarding the use of technology in the MSME sector and also trying to understand whether the technology used in Indian MSMEs is in line with the global level. This survey can prove to be a game-changer for MSMEs.
A comparative study in technology adoption
A comparative study of Indian MSMEs with European countries is being done in technology adoption. The approach of MSMEs at the global level is also being analyzed so that Indian MSMEs can be prepared accordingly. According to sources, special focus is being given to making medium enterprises a part of the global supply chain. In the budget presented in February, the definition of MSMEs was changed and now those with an annual turnover of Rs 100 to Rs 500 crore will come under the medium category. This change will provide more support and incentives to medium enterprises.
Schemes will be simple and cluster-based industrial hubs
According to sources, the focus will be on medium-class credit as they face many challenges regarding credit. However, an attempt has been made to overcome these challenges in the budget this time. All the schemes related to MSMEs will be simplified by combining them in one place, so that they can easily apply for the scheme. Cluster based industrial hubs will also be developed. This step will provide financial support and infrastructure to MSMEs.
Loans to MSMEs through UPI
On the other hand, loans to MSMEs through UPI can start by the end of this month. This facility will be mainly for micro-entrepreneurs. Finance Minister Nirmala Sitharaman announced this in the budget presented in July last year. A separate portal has been prepared to give loans through UPI. SBI has started giving loans through UPI as a pilot. All banks are preparing a framework to give loans through UPI. This facility will help MSMEs to avail loans easily.