(The Gist of Kurukshetra) MSME FOR
MSME FOR INCLUSIVE DEVELOPMENT
MSMEs have been contributing to spreading entrepreneurial culture through
business innovations. Unique feature of MSMEs is that they are widely dispersed
across sectors of economy producing diverse range of products and services to
meet local as well as global markets. Needless to mention that the contribution
of MSME is 8 per cent of GDP, 45 per cent of manufacturing output and 40 per
cent of exports of the country and uniquely they are least investment driven
with high returns. Employment creation is next to agriculture, thus MSME sector
has potential of tapping individuals to associate with economic activities by
way of self-employment.
Micro, Small and Medium Enterprises:
The Government of India has enacted the Micro, Small and Medium Enterprises
Development (MSMED) Act, 2006 in terms of which the definition of enterprises,
micro, small and medium enterprises is as under (Ministry of Law and Justice,
Enterprise means an industrial undertaking or a business concern or any other
establishment, by whatever name called, engaged in the manufacture or production
of goods, in any manner, pertaining to any industry specified in the First
Schedule to the Industries (Development and Regulation) Act, 1951 or engaged in
providing or rendering of any service or services.
Enterprises engaged in the manufacture or production, processing or
preservation of goods are specified below:
A micro enterprise is an enterprise where investment in plant and machinery does
not exceed Rs. 25 lakh; A small enterprise is an enterprise where the investment
in plant and machinery is more than Rs. 25 lakh but does not exceed Rs. 5 crore;
A medium enterprise is an enterprise where the investment in plant and machinery
is more than Rs.5 crore but does not exceed Rs.10 crore.
In case of the above enterprises, investment in plant and machinery is the
original cost excluding land and building.
Enterprises engaged in providing or rendering of services and whose investment
in equipment (original cost excluding land and building and furniture, fittings
and other items not directly related to the service rendered or as may be
notified under the MSMED Act, 2006 are specified below.
A micro enterprise is an enterprise where the
investment in equipment does not exceed Rs. 10 lakh;
A small enterprise is an enterprise where the
investment in equipment is more than Rs.10 lakh but does not exceed Rs. 2
A medium enterprise is an enterprise where the
investment in equipment is more than Rs. 2 crore but does not exceed Rs. 5
In February, 2018, the Union Cabinet chaired by the Prime Minister has approved
change on the basis of classifying Micro, Small and Medium enterprises from
'investment in plant & machinery/equipment' to 'annual turnover'. This will
encourage ease of doing business, make the norms of classification growth
oriented and align them to the new tax regime revolving around GST (Goods &
Services Tax) and the consequent growth will pave the way for increased direct
and indirect employment in the MSME sector of the country. Section 7 of the
Micro, Small and Medium Enterprises Development (MSMED) Act, 2006 will
accordingly be amended to define units producing goods and rendering services in
terms of annual turnover as follows:
A micro enterprise will be defined as a unit where the
annual turnover does not exceed five crore rupees;
A small enterprise will be defined as a unit where the
annual turnover is more than five crore rupees but does not exceed Rs 75
A medium enterprise will be defined as a unit where
the annual turnover is more than seventy five crore rupees but does not
exceed Rs 250 crore.
Additionally, the Central Government may, by
notification, vary turnover limits, which shall not exceed thrice the limits
specified in Section 7 of the MSMED Act.
The Ministry of Micro, Small and Medium Enterprises (MSME) is implementing
various flagship programmes related to MSMEs. The Implementation of policies and
various programmes and schemes for providing infrastructure and support services
to MSME's is undertaken through its attached office, namely the Office of the
Development Commissioner (DCMSME)), National Small Industries Corporation (NSIC),
Khadi and Village Industries Commission (KVIC); the Coir Board, and training
institutes viz., National Institute for Micro, Small and Medium Enterprises (NI-MSME),
Hyderabad and Mahatma Gandhi Institute for Rural Industrialization (MGIRI)
(Ministry of Micro Small and Medium Enterprises, 2018)
IT Initiatives of Ministry:
My MSME : Web based application module to submit and track online applications
under various schemes of the Ministry. Udyog Aadhar Memorandum : Mobile friendly
application for registration of MSMEs on self certification basis. MSME
Samadhaan: Empowers MSMEs to resolve the issues of delayed payments: https://
samadhaan.msme.gov.in. MSME Sambandh: Disseminates information on procurements
by CPSES / Government Departments : https"//sambandh.msme.gov.in.
New Initiatives of Ministry
National SC/ST Hub : An initiative targeted developing a supporting eco-system
for SC/ST entrepreneurs. Zero Defect Zero Effect (ZED) Scheme envisages
promotion of Zero Defect and Zero Effect (ZED) manufacturing amongst MSMEs to
promote adaptation of quality tools/systems and energy efficient manufacturing.
Accessibility to Credit:
Prime Minister's Employment Generation Programme (PMEGP): Margin money
assistance of Rs.4735.93 crore provided to 1,93,818 MSME units Credit Linked
Capital Subsidy Scheme (CLCSS): Subsidy worth Rs. 1169.03 crore disbursed to
20,385 MSES Credit Guarantee Trust Fund for Micro and Small Enterprises (CGTMSE):
Credit Guarantee cover of Rs. 80221.59 crore approved for 16,32,722 MSES.
Skill Development and Training:
EDP Scheme: 1,17,532 people trained under IMC/EDP/ESDP/MDP programmes. ATI
Scheme: 2,07,235 people attended 7407 EDPs/ESDPs. NSIC: Technical Service
Centres of NSIC trained 1,17,000 people across the Country. NIMSME; 1,72,213
youth / executives trained in 5290 training programmes. MGIRI: Skill of 5000
people was upgraded in 400 training programmes. Technology Centers: 6,42,272
youth were benefitted from various programs by TCs.
Sustainable Development Goals and MSMEs :
The critical contribution of MSMEs to broader social economic objectives,
including job creation makes them a key priority area for achieving the
Sustainable Development Goals (SDGs). Job creation through MSMEs will often
directly benefit the poor and vulnerable, particularly women and youth, thereby
directly reducing poverty, increasing income and positively impacting on
household investments in education and health over time. MSME development has
the potential for wide reaching impacts on the SDGs globally, including SDG 1
(end poverty), SDG 2 (zero hunger), SDG 3 (good health and well-being), SDG 5
(gender equality), SDG 8 (promote inclusive and sustainable economic growth,
employment and decent work), and SDG 9 improve sustainable industrialization and
fostering innovation) (Liu, 2017).
Schemes for Women:
Trade Related Entrepreneurship Assistance and Development (TREAD) Scheme for
& Small Enterprises cluster development programme (MSE-CDP). Credit Guarantee
fund scheme for MSES. Support for entrepreneurial and managerial development .
Exhibitions for women under promotional package for MSES.
MSME/ Entrepreneurship related schemes and support services of various other
ministries and printed an e-book titled "MSME Schemes" for dissemination of
information to entrepreneurs and existing MSMEs. The e-book is available on
ministry website. (https://msme.gov.in/)
Women in Self Help groups (SHGs) are able to access the finance from Banks and
Government schemes to start micro and small business. The Central and State
Government Departments are promoting the Entrepreneurship and framing
appropriate policies and providing incentives for all group of people including
women, farmers, persons with disability and SCs and STs. The
Banks are also launching various MSME schemes for start-ups/ budding
entrepreneurs/ existing MSMEs. With introduction of new tax reforms in Indian
economy i.e. Goods & Services Tax (GST), most of these groups are unable to
continue in the unorganized sector. The small and medium enterprises are needed
to register their business entity in formal sector and provide minimum social
security provisions for their employees and also gain benefits in the new tax
Success stories of Women Entrepreneurs:
Shri Mahila Griha Udyog Lijjat Papad, popularly known as Lijjat, is an Indian
women's cooperative involved in manufacturing of various fast-moving consumer
goods. The organisation's main objective is empowerment of women by providing
them employment opportunities. Started in the year 1959 with a seed capital of
Rs. 80, Lijjat has an annual turnover of around Rs. 6.50 billion (over 100
million USD) in 2010, with Rs. 290 million in exports. It provides employment to
around 43,000 (in 2015) women. Lijjat is headquartered in Mumbai and has 81
branches and 27 divisions all over India. Lijjat is primarily a cottage
industry, urban by its origin, which has spread to the rural areas. It is
considered as one of the most remarkable entrepreneurial initiatives by women
that is identified with female empowerment in India.
The Mulukanoor Women's Co-operative Dairy, the country's maiden dairy, set up
and run by women, has been registering a steady growth since its inception. For
instance, the dairy posted net profits of Rs 12.51 lakh in 2014-15 fiscal as
against Rs 10.86 lakh and Rs 9.20 lakh in 2013-14 and 2012-13 financial years.
The women-oriented dairy was established by 72 co-operatives societies,
comprising 3,600 women members, on the outskirts of Bheemadevarapalli mandal
headquarters, on the borders of Karimnagar- Warangal, on August 17, 2002.
Currently, the dairy has 127 societies also known as women dairy co- operatives
(WDC) that contain over 20,000 members from 120 villages located in Karimnagar
and Warangal districts. It caters to customers from Karimnagar, Warangal,
Adilabad and Medak districts.
The Self-Employed Women's Association (SEWA) is successful and its efforts have
mobilized large numbers of poor self-employed women for empowerment. From small
beginnings in 1972, as a group of poor, illiterate women working as casual
laborers in the wholesale textile markets, SEWA's membership has grown to
535,000 in its home state of Gujarat, and around 700,000 throughout India. The
annual rate of membership growth has averaged between 25 per cent and 35 per
cent in each of the past three five-year periods.
Women MSME Associations in India:
The following Women associations are promoting women entrepreneurship and
MSMEs. The prospective women entrepreneurs can access various from these
Federation of Indian Women Entrepreneurs (FIWE), New Delhi.
Consortium of Women Entrepreneurs (CWEI), New Delhi.
Association of Lady Entrepreneurs of Andhra Pradesh (ALEAP),
Association of Women Entrepreneurs of Karnataka (AWAKE),
Self-Employed Women's Association (SEWA), Ahmedabad.
Women Entrepreneurs Promotion Association (WEPA), Chennai.
The marketing Organisation of Women Enterprises (MOOWES),
Bihar Mahila Udyog Sangh, Patna.
Mahakoushal Asso. of Woman Entrepreneurs [MAWE), Jabalpur.
Women Entrepreneurship Promotional Association, Chennai.
WE-HUB – Telangana:
The Government of Telangana has established WE-Hub at Hyderabad. The primary
objective of WE HUB is to enable women entrepreneurs to succeed in their
start-ups or businesses by overcoming structural challenges. Through its primary
activity, it is planned to create an eco- system that drives social change
across India and the world. WE HUB is envisioned to create a supportive
community for aspiring women entrepreneurs where they can interact with VCs for
funding, connect with corporates for scaling up their business, get advice from
mentors to fine tune ideas, avoid costly mistakes, and march forward on the path
to success with renewed confidence.
In India, almost 31 million MSMEs have been a dominant force in creating ample
opportunities for the inclusive socio-economic growth and also acting as a
nurturing seedbed for entrepreneurial talent of perspective global players. Over
the past five decades, the Indian Government had initiated various progressive
credit policies and practices, new schemes to support the MSME sector for the
promotion, development and enhancing the competitiveness of these enterprises,
preference in Government procurements to products and services of the micro and
small enterprises, more effective mechanisms for mitigating the problems of
delayed payments to micro and small enterprises and simplification of the
process of closure of business by all three categories of enterprises.
However, there is still a lack of awareness in access to finance and marketing,
adoption of innovative technologies are the major challenges for the MSMEs to
sustain in the present markets. With the increasing global competition and
uncertainty due to global meltdown, there is a need for the MSMEs to incorporate
the latest technology into their production process as well as in their
financing, marketing and management functions, to cut down the cost, gain
efficiency and consistency. This will help them to become successful and
contribute to the Indian economy in the long run.