The MSME businesses in India have grown in to full fledged businesses
with the help of the support from the Indian Government. The role of
the Indian Government in making the MSME ecosystem robust is of
paramount importance. There have been many initiatives in the past as
well as in the present that are taking care of all the activities pertaining
to the welfare of the MSME ecosystem. It is a fortunate deal for all the
business owners and the entrepreneurs belonging to this sector to be
able to carve a place for themselves in such a growing sector. The
MSME development act came into force in the year 2006 to address
policy issues affecting MSMEs as well as the coverage and investment
ceiling of the sector. The Act seeks to facilitate the development of
these enterprises and enhance their competitiveness.
Over the last few years, India has created a robust ecosystem for
startups and entrepreneurs. The country is now home to the third-
largest startup ecosystem in the world, according to the Economic
Survey 2021-22 report released earlier this year. Over 60,000 startups
are operating in India, and the country now boasts over 100 unicorns.
However, not all of them have the right resources to thrive in the
ecosystem and create a strong presence. The government in India
actively supports startups and entrepreneurs by launching various
programmes and initiatives to train as well as provide financial
assistance, technical support, subsidies and other essential services to
these entrepreneurs and startups to fuel their growth. There has been
many recent developments in MSME sector.
The following are some of the well known schemes developed by the
Indian Government for the befit of the MSME sector :
A. ZED Certification Scheme :
The Zero Defect Zero Effect (ZED) scheme was launched in 2016 by
the government of India to create awareness about ZED manufacturing
among MSMEs and motivate them towards the assessment of their
enterprise for ZED and support them. The initiative also indicates
production, manufacturing efficiency, improved human resource,
quality, financial efficiency, energy-saving, mitigation, pollution, and
includes intellectual property rights and the design of products and
processes.
B. Dairy Entrepreneurship Development Scheme :
DEDS (Dairy Entrepreneurship Development Scheme) is a scheme
launched by the Department of Animal Husbandry, fisheries, and
dairying to create self-employment opportunities in the dairy sector.
These opportunities will comprise activities such as enhancement of
milk production, transportation, procurement, processing,
preservation, and marketing by providing back-end capital for bankable
projects of 25 percent of the total project cost for candidates under the
general category and 33.33 percent for farmers under the SC/ST
category.
C. Sub- Mission on Agricultural Mechanization :
It was an initiative launched by the Indian Government that aims to
expand the reach of farm mechanization to small and marginal farmers
in such areas where the availability of farm power is low enough to
boost productivity. Under SMAM, both the central government and the
states will contribute 75 percent and 25 percent, respectively.
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It also aims to create awareness among stakeholders through capacity-
building activities and demonstrations, and will also provide financial
help to small and marginal farmers for hiring implements and
machinery in low mechanised regions. In particular, the initiative aims
to popularise technology for primary processing, low-cost scientific
storage/transport, value addition, and crop by-product management
through capacity building and demonstrations by farmers and end-
users.
D. Credit Linked Capital Subsidy for Technology Upgradation (CLCSS)
The Credit Linked Capital Subsidy for Technology Upgrading (CLCSS)
program recognizes that technology may help Indian entrepreneurs and
MSMEs compete with global competition.
This is why the government created the Credit Linked Capital Subsidy
for Technology Upgrading (CLCSS) plan, in which the government helps
MSMEs improve their technologies and deploy cutting-edge
technological platforms for their businesses.
The government gives a 15% subsidy for investments up to Rs 1 crore in
technology upgrades for startups and MSMEs in India under the CLCSS.
This government program covers almost 7500 items and services All these
above mentioned programmmes were some of the major special efforts
that the Government of India undertook in order to help foster the development
and growth of the MSME sector. The Government along with the Ministry of
MSME have been very vigilant on all the major activities of the MSMEs and
always found a way to help these businesses move forward. Many of the
Government policies for MSMEs in India proved to be very fruitful.
The MSME contribution to GDP 2022 was very high in contrast to
previous years that were capped at 30-40%. There is a lot of activity
that is yet unmonitored and the government is making serious efforts
to help legitimize the majority of these MSME businesses that are
working from the fringes. There are about 6.3 Cr MSMEs that are
functioning in India and providing approximately 11 Cr jobs. This
promise of new job opportunities have made majority of the population
from the rural areas to look for jobs within the MSME sector. There are
ample of opportunities for newcomers as the sector is growing and
evolving on a regular basis now. This gives rise to a new breed of skilled
employees.
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There is a slow but steady movement of the Indian MSMEs that are
trying to tap into the potential of the International market via exports
of goods. The contribution of the MSMEs in Indian economy is beyond
the bounds and with the passage of time the activities of the MSMEs
are increasing.
Since the MSME development act came into force in 2006, there have
been many amendments and changes within the MSME sector and as a
result of which many new entrants have come into this space. The level
of competition within the MSME sector has increased a lot by multi
folds and recent developments in the MSME sector point towards a
massive upside for the MSME businesses. The Government policies set
for MSMEs in India had a lasting impact on the Indian economy.