The MSME sector is one of the key sectors of the Indian economy. Being one of the biggest job creators, small enterprises contribute significantly to the economy. The sector is the backbone of the national economic structure and has imparted resilience to ward off global economic shocks and adversities.
With around 63.4 million units spread across the geographical expanse of the country, MSMEs contribute around 6.11 per cent of the GDP and 24.63 per cent of the services. They contribute around 40 per cent of the overall exports from India. The MSME sector is by far the largest provider of employment following agriculture, employing over 120 million people, with 51.2 per cent in rural areas.
CII works intensively towards driving the MSME agenda forward. With the objective of creating an enabled and supportive system for Indian MSMEs and empower MSMEs to be globally competitive, CII addresses the needs of MSMEs through continuous engagement with the Government.
The CII SME Finance Facilitation Centre, launched in June 2014 provides advisory and credit facilitation support to MSMEs. It is operating as a one-stop shop for aggregating financing options for MSMEs from multiple large financial institutions.
The CII Technology and Deployment Centre for MSMEs (CII TFC) was launched in November 2016 to provide the latest technological support for MSMEs. This service operates through online portal www.ciitfc.in, summating different upgraded and latest technologies from multiple technology partners.
Keeping in mind the upcoming Budget, CII has come out with below major recommendations for boosting growth in the MSME sector.
The Public Procurement Policy mandates all Public Sector Undertakings (PSUs) and Government departments to procure 25 per cent of their annual requirements from MSMEs. CII recommends the following measures to address this low engagement issue in the Budget:
A ‘Digital Platform’ under the aegis of Ministry of MSME could be announced to capture information on all aspects of domestic MSMEs (location, products, etc.) registered under the Udyog Aadhaar Portal. This will help the global firms to get access to ‘one-stop’ platform on domestic MSMEs and encourage integration between the two.
MSMEs with 70 per cent turnover from exports could be awarded special status, entitling them to various incentives such as subsidized land in an export promotion zone, faster clearances, cheaper finance, etc.
The MSME Census and the Economic Census which provide information on MSMEs are very dated. The Government could appoint some agency to commission regular surveys on the MSME sector as the paucity of timely and accurate data hampers research in this sector which in turn prevents formulation of suitable policies.
With the forthcoming Budget providing impetus to the MSME sector, a fillip to growth and employment can be expected.
