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(GIST OF YOJANA) EMPOWERING INDIA’S MSME SECTOR -JANUARY-2018

EMPOWERING INDIA’S MSME SECTOR

The Micro, small or medium enterprises sector, or the MSME sector as it is called, has been recognized globally as a major contributor to Gross domestic Product (GDP) and stimulator for economic growth. The sector plays a crucial role in providing employment opportunities to masses, fosters entrepreneurship and growth led by innovation. The sector also complements large businesses as ancillary units in fulfilling their business contributing to the socio-economic development and inclusive growth of the country.

India Perspective

From the Indian economic perspective, the sector occupies a position of strategic importance. Nearly, 90 percent of the industrial units belong to this sector, employing 40 percent of India’s workforce. The sector produces more than 8000 products ranging from traditional to hightech precision items. With Indian economy on the fulcrum of the ever-rising growth
curve, which is likely to become a $5 trillion economy by 2025, the development of the sector has become all the more critical. Thus, devising innovative political.

Strengthening MSMEs

In spite of the sector ’s inherent potential to grow, there exist many challenges as well. For instance, timely access to credit, infrastructural gaps, technological obsolescence, sub-optional
access to market and skilled manpower are some of the challenges which the sector faces. Moreover, with increasing competition from neighbouring countries like China, Indonesia, Philippines, and Thailand, it has become imperative for eh sector to adopt robust strategies to become globally competitive.

Study Material for IAS (UPSC) Pre 2018

Prime Ministers Empowerment generation Programme (PMEGP)

Prime ministers empowerment generation programme is a flagship scheme of the Ministry, whereby Micro enterprises are set up every year creating employment opportunities across the country. The major objective is to generate employment opportunities in rural as well as urban areas of the country through setting up of new self-employment ventures/projects/micro
enterprises. The programme has tremendous potential for job creation.

Khadi and Village Industries Khadi and village industries are two

important national heritage sectors of India. The Khadi and village industries sector play a very vital role in providing employment opportunities in rural areas a low per capita investment especially to people belonging to weaker sections of the society. Ministry of Micro, small and medium enterprises has a host of schemes for the Khadi and village industry sectors provide gainful employment at the door steps of the rural unemployed, especially youth and women.

Access to New Markets

To enlarge the existing market size of MSMEs and to build enduring interdependent relationships, an overall goal has been set up by the government. It was proposed that ministries and
departments of central government of central public sector enterprises, shall procure 20 percent of goods and services from micro and small enterprises (MSEs), as a part of public procurement policy, MSE, order 2012. The policy not only focuses on MSEs, but also encourages MSEs owned by Scheduled Caste (SC) and scheduled tribe (ST) entrepreneurs to
participate in the public procurement market.

The hub is currently operational from national small industries corporation(NSIC), a central public sector enterprises (CPSE) under M/o MSME, Gol. A special credit liked capital subsidy scheme (SCLCSS) has also been formed under the hub to facilitate the purchase of plant and Machinery by existing as well new SC-Stenterprises. The scheme envisages the
upfront capital subsidy amount of 25percent.