(The Gist of Kurukshetra) MSME FOR INCLUSIVE DEVELOPMENT [OCTOBER-2018]


(The Gist of Kurukshetra) MSME FOR INCLUSIVE DEVELOPMENT

[OCTOBER-2018]


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, 2006)

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.

Manufacturing Sector:

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.

Service Sector:

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 crore;

  •  A medium enterprise is an enterprise where the investment in equipment is more than Rs. 2 crore but does not exceed Rs. 5 crore.

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 crore;

  •  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.

Government Schemes:

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 Women. Micro
& 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 regime.

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 associations.

  1. Federation of Indian Women Entrepreneurs (FIWE), New Delhi.

  2. Consortium of Women Entrepreneurs (CWEI), New Delhi.

  3. Association of Lady Entrepreneurs of Andhra Pradesh (ALEAP), Hyderabad.

  4. Association of Women Entrepreneurs of Karnataka (AWAKE), Bengalore.

  5. Self-Employed Women's Association (SEWA), Ahmedabad.

  6. Women Entrepreneurs Promotion Association (WEPA), Chennai.

  7. The marketing Organisation of Women Enterprises (MOOWES), Chennai.

  8. Bihar Mahila Udyog Sangh, Patna.

  9. Mahakoushal Asso. of Woman Entrepreneurs [MAWE), Jabalpur.

  10. 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.

Conclusion:

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.

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