MSME

MSMEs: Backbone of Indian economy

Published

2 years ago

October 31, 2022

BK Editor

Mohmad Iqbal Marazi

Iqbal Marazi

MSME sector has emerged as a highly vibrant and dynamic sector of the Indian economy over the last five decades. It contributes significantly to the economic and social development of the country. But, the sector was among the most affected sections during the COVID19 pandemic.

It has been reported that lockdown induced the closing of thousands of MSMEs in the country, despite the government of India’s Rs 20 lakh crore covid response package. According to a recent report by Small Industries Development Bank Of India(SIDBI), two-thirds of MSME’s in India were shut for a period of three months or more in FY2021 and over half of all MSMEs saw a decline of 25 percent in revenue.

WHAT ARE MSMEs

MSMEs are micro, small and medium enterprises categorised on the basis of investment in plant and machinery and the annual turnover in accordance with the Micro, Small and Medium Enterprises Development (MSMED) Act, 2006. MSMEs in India have evolved considerably since independence. From being referred to merely as the small-scale industries (SSI) sector in 1960s and 70s, the MSME sector has progressed in scale and in the scope of business activities over the years. MSME consists of both traditional and modern small industries in India. Small industries are divided into eight subgroups: Handlooms, Handicrafts, Sericulture, Khadi And Village Industries, Small Scale Industries and Power looms.

WHY ARE MSMEs SIGNIFICANT FOR INDIA’s DEVELOPMENT

1) Acting as engines of entrepreneurship: The indigenous skills and grassroots innovations can be channelled into MSME business ideas as they require very limited capital investment, are low risk and are not bureaucratically tedious.

2) Completing the economic supply chain: MSMEs are complimentary to large Industries as ancillary units and form an integral part of the value chain by filling the localised gaps.

3) Equitably distributing the opportunities of development: MSME units provide source of income, in wide range of non- agricultural activities and provide employment opportunities in rural areas, especially for the non-traditional artisans and weaker sections of the society.

4) Encouraging inclusive growth via employment generation: MSME are the second largest employers of human resources, after agriculture. They are, therefore considered to be more labour-intensive and less capital-intensive. They provide gainful employment to marginalised sections.

5) Growing role in technology-intensive and rapidly emerging sectors: Indian MSME’s are not limited to small business only but are rapidly increasing their presence, like Financial Technology, Defence, Manufacturing and Space among others.

6) Aiding achievement of sustainable development goals: MSMEs produce products using locally available resources, both material and labour. These products and processes help in achievement of SDGs both directly and indirectly. Some of SDGs are as:

SDG1 (End Poverty) Alleviating poverty through micro franchising

SDG3 (Good health and wellbeing)

SDG6 (Sanitation for all)

SDG7 (Energy for all)

SDG10 (Reduced Inequalities)

SDG14 (Life below water)

India’s MSME sector contributes almost 30% of the GDP. Almost half of the exports come from micro, small and medium enterprises. In India around 20% of micro, small and medium enterprises are micro enterprises. More than half of micro, small and medium enterprises are owned by general category entrepreneurs.

RECENT INITIATIVES TAKEN BY GOVERNMENT OF INDIA FOR MSMEs:

1) Improvement in overall performance and quality. Raising and Accelerating MSME Performance (RAMP) is a world bank assisted central sector scheme. The revamped Zero Defect Zero Effect (ZED) Certification scheme.

2)Access to Finance, Collateral free loan 59-minute loan portal.

3) Access to markets, mandating PSEs to compulsorily procure 25% of their total purchases from MSME’s, International Cooperation Scheme, Marketing Assistance Scheme.

4) Technology Upgradation, Setting up 15 new and upgrading 18 existing tool rooms.

5) Ease of doing business, randomised inspection through a computerized random allotment, reduced environment clearance and certification burden.

The author is a PG student of economics at HNB Garhwal Central University Uttrakhand. He can be reached at iqbalmarazi999@gmail.com

Up Next

Lack of physical activity, stress affect well-being of children

Don't Miss

Conserving Hangul: The Kashmir’s Pride

Click to comment

KashCrafts

KVIC distributes Rs 30 cr among 10,800 artisans in J&K: MSME Minstry

Published

4 years ago

December 31, 2020

BK Editor

BK News

Srinagar, Dec 31: To help artisans to sustain their livelihoods, Khadi and Village Industries Commission (KVIC) distributed Rs 29.65 crore to Khadi institutions in Jammu and Kashmir during the COVID19 pandemic.

The amount has been disbursed from May 2020 to September 2020 to 84 Khadi institutions in J&K benefitting 10,800 Khadi artisans associated with these institutions, MSME Minstry said in a statement.

The financial assistance has been given under Modified Marketing Development Assistance (MMDA) scheme of KVIC which is directly linked with the production activities. Under this scheme, money is directly transferred into the bank accounts of artisans through DBT.

During the COVID19 lockdown period, a special drive was also launched by KVIC to settle 951 old MMDA claims of J&K Khadi institutions that were related to 2016-17 to 2018-19, pending due to various technical reasons.

KVIC Chairman Vinai Kumar Saxena said through this special drive, the payment of Rs 29.65 crore released to 84 Khadi institutions has directly benefited 10,800 artisan families in J&K which goes on to strengthen the Prime Minister’s dream of making every weaker section “Aatmanirbhar”.

“Apart from ensuring financial assistance through MMDA Scheme to Khadi Institutions and artisans, KVIC also roped in thousands of women artisans working in self-help groups in Jammu, Udhampur, Pulwama, Kupwara and Anantnag in stitching of Khadi face masks. Almost 7 lakh Khadi face masks were stitched by these women artisans and supplied to the J&K Government,” Saxena said.

At present, 103 Khadi Institutions are working in J&K. Of these, 12 are primarily dealing in the production of Kashmir’s globally acclaimed Pashmina Shawls. Over 60% of these shawls are produced in Anantnag, Bandipora, Pulwama, and Kulgam. The products made in J&K have found a large number of consumers in states like Delhi, Rajasthan, Haryana, Uttar Pradesh, Madhya Pradesh, and Uttarakhand. These products are being sold through various Khadi India Sale outlets and through KVIC e-portal.

Industry

Imran Murtaza takes oath as president Industrial Association Khunmoh

Published

4 years ago

November 12, 2020

BK Editor

Industrial Association Khunmoh oathtaking

BK News

Srinagar, Nov 12: Industrial Association Khunmoh (IAK) Thursday held a special ceremony to administer the oath of office to its newly elected body members at Khunmoh Industrial Office.

Elections for the executive body of the Industrial Association Khunmoh were recently held, in which Imran Murtaza of Agrino Snacking won by the margin of 26 votes for the post of president.

Zahoor Ahmad Malik and Khan Yaseer Yousouf were elected as senior vice president and vice president. Sajad Ahmad and Abid Misgar as secretary-general and secretary finance, whereas, Oves Ur Rehman and Shaheen Khan were elected, secretary publicity and secretary IAK.

The oathtaking ceremony was held in presence of Managing Director SIDCO Agha Aijaz Hussain, J&K Bank zonal officer Syed Rais Maqbool, president FCIK Shahid Kamili, ex-president KCCI Sheikh Ashiq, ex-president FCIK Mohd Ashraf Mir, and members of IAK and Khunmoh Welfare Association.

Speakers, on the occasion, talked about the role of entrepreneurship and the scope of the manufacturing sector in Kashmir. They applauded J&K Bank for its role in the growth of industries in Kashmir and its special attention towards the MSMEs in the estates.

President IAK Imran Murtaza said special attention and a humane approach is needed for the industries in Kashmir, which remained mostly closed in the last two years.

“Industries are in dire need of a dry port and a marketing intervention package. In times of information era, technology infrastructure upgradation in all estate is important, which is mostly lagging,” he said.

“A credit line for industries should come under different schemes. We have cash flow cycles, which are different from general trading and that should be given special consideration while providing a credit line for industries.”

IAK produces a large variety of products like POP, bakery, cement products, milk, furniture, etc mostly for consumption in the local market.

Industry

On Gandhi Jayanti, KVIC rolls out employment generation initiative in J&K

Published

4 years ago

October 2, 2020

BK Editor

Chairman asks for setting up 2 SFURTI clusters

BK News

Srinagar, Oct 2: Khadi and Village Industries Commission (KVIC) rolled out multiple employment generation activities in Jammu & Kashmir to celebrate 151st birth anniversary of Mahatma Gandhi on Friday, a PIB release issued here said.

Under Kumhar Sashaktikaran Yojana, KVIC Chairman Vinai Kumar Saxena distributed electric potter wheels to 100 potter families in Baramulla while also inaugurating the training of artisans in Crewel embroidery and Sozni Embroidery in Ganderbal and Pulwama districts. He also launched the training of artisans in willow work, a popular local art, in Baramulla district of Jammu & Kashmir.

The activities are part of the 150 mega events organized by KVIC across the country to celebrate 151st Gandhi Jayanti. These activities are expected to create a livelihood for over 500 people in the state.

KVIC Chairman instructed the local KVIC officials to initiate the process for setting up two SFURTI (Scheme of Fund for Regeneration of Traditional Industries)

clusters in Jammu & Kashmir for the embroidery work and for making papier mâché the peculiar Kashmiri handmade paper product. He lauded the artisans of Jammu & Kashmir saying they had the capacity and the talent of producing some very unique products including pottery.

“Gandhi Ji had always emphasized on empowering the Kashmiri people through Khadi. Our Prime Minister too has a special place for Kashmir in his heart and KVIC is working to fulfil this dream of the Prime Minister by creating sustainable employment opportunities in the state. Several art forms of Kashmir like Crewel and Sozni embroidery, Pashmina shawls, paper mache and its pottery are internationally acclaimed. By providing artisans proper training, advanced equipment and marketing platform, these products can definitely make them aatmanirbhar,” Saxena said.

A number of artisans including potters present on the occasion interacted with the KVIC Chairman and thanked him for providing them with the support they needed to earn a better livelihood. Mushtaq, a potter who was given an electric potter wheel by KVIC, said his work would be easier now with these equipment and that his daily production of clay material and his income would also increase significantly.