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In News
- Recently, the Union Ministry of Commerce and Industry, Consumer Affairs, Food and Public Distribution and Textiles held the fourth Plenary Session of B20 India Inception Meeting on Building Resilient Global Value Chains in Gandhinagar.
What are MSMEs?
- MSMEs or Micro, Small, and Medium Enterprises are businesses that are defined by their investment and turnover levels. They are considered an important sector of the economy as they create jobs, generate income, and promote entrepreneurship.
Classification of MSMEs:
- Based on their investment and turnover levels:
- Classification of MSMEs : (Based on the nature of activities and sectors)
- Manufacturing Enterprise: Manufacturing of goods pertaining to any industry specified in the first schedule of the industries (Development and Regulation) Act, 1951
- Service Enterprise: Providing or rendering of services and covered under ‘Services’ sector as defined in the Micro, Small and Medium Enterprises Development (MSMED) Act, 2006.
Advantages of MSMEs |
Challenges of MSMEs |
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Important government schemes for MSMEs:
- Harmonizing value chain: Government to focus on integrating India’s value chains with the rest of the world and creating logistics that are easier and faster is crucial to make it easier for international companies to include India in their value chains.
- Quality assurance: Government to focus on creating Quality as the most important factor in the success story of India through steps including- setting global benchmarks, harmonizing Indian standards with global standards, and consumers becoming more demanding of quality..
- Comprehensive Economic Partnership Agreement (CEPA): It will help MSMEs of both India and UAE to leverage benefits of the District as export hub initiative of the government.
- Under this initiative, every district for their unique products and identify the specialty of districts by knowing which district exports which products.
- This initiative is expected to help in promoting local products and in turn, boost the local economy.
- Pradhan Mantri MUDRA Yojana (PMMY)
- Prime Minister’s Employment Generation Programme (PMEGP):
- Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE): This scheme provides collateral-free credit to micro and small enterprises through a credit guarantee mechanism.
- Stand Up India: The scheme provides financial assistance to scheduled caste (SC), scheduled tribe (ST) and women entrepreneurs for setting up new enterprises.
What more can be done?
- Access to finance: The government can work to improve access to finance for MSMEs by providing credit guarantees, offering tax incentives for lending to MSMEs, and encouraging banks and other financial institutions to lend to MSMEs.
- Infrastructure development: Improving infrastructure in areas where MSMEs are concentrated, such as by building roads, providing electricity and water supply, and improving transportation.
- Skilled labor: Taking steps to improve the availability of skilled labor by investing in vocational education and training programs, and encouraging workers to acquire new skills.
- Simplifying regulations: The government can simplify regulations and procedures for MSMEs, such as by streamlining registration and compliance processes and reducing the bureaucratic burden on MSMEs.
- Support for technology adoption: The government can support the adoption of new technologies by MSMEs by providing subsidies, tax incentives, and other forms of financial assistance to help them modernize their operations.
- Support for innovation: The government can help MSMEs to innovate by providing funding, mentorship, and other forms of support to help them develop new products and services.
Need for enabling ecosystem: To become a trusted and resilient partner in global value chains, the government is focusing on creating an ecosystem that is simpler, faster, and promotes ease of doing business for MSMEs.
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