The future of economy lies in MSME. MSME will help in building new India. Promote MSME to promote the development of India.
All these statements are very often read and talk about. We all came through such conversations many times. Ever wondered why MSME got so popular. Ever thought is really MSME a gem or it is a hyped idea of bureaucrats.
So, to understand the importance of MSME it is necessary to know what are MSME’s and through a simple reading of full form any one can know what is MSME. Micro, Small and Medium enterprises.
Indian economy till recent decades has been catered and nurtured by big corporates only. The only drawback of this custom was that the benefits are reaped by few sections of society. MSME fills this gap by giving opportunity to even lower, small and mid-sized entities, which brings welfare to all section of society.
For an economy to thrive it is necessary that each sector of the economy develop and grows parallelly. Ministry of MSME mission is to achieve objective of upliftment of sectors/start ups/artisan/agriculturist who are not financial and technically empowered as compared to other big industrial sector. Below given are some highlights for MSME as captured in the Annual Report 2019-20 of Ministry of MSME.
- Large employment opportunity at lower cost than large industries
- MSME has created about 11.10 crore jobs in the country as per National Sample Survey 73rd round (2015-16)
- Credit Support through prime Minister’s Employment Generation programme (pMEGp), Credit linked capital subsidy scheme
- Promotion for skill development: 2,69,005 people trained under these schemes/organisations
Various small business setups are now willing to get registered under MSMED Act. There are various benefits for an entity when registered as MSME. Few are highlighted below:
- Government of India is continuously working to strengthen MSME. Therefore MSME’s always get priority and will be benefitted in future also.
- Easy Financial Assistance: Banks has to complete their lending profile by granting loans to priority sectors. Banks thus grants loan easily to MSME’s. Further various schemes are launched by Government to provide financial assistance to MSME
Like Credit Guarantee Trust Fund for Micro & Small Enterprises (CGTMSE), Interest Subsidy Eligibility Certificate (ISEC) etc.
- Working Capital Facility: Small start-up usually face financial crunch for their daily affairs that is working capital. But MSME’s has been provided facility to get easy discounting facility through TREDS platform. TREDS is an online platform which includes financing of Trade receivables of MSME from corporates and other buyers including Government department and public sector undertaking (PSUs) through multiple financiers like banks.
- Training Facility: For development of MSME sector in India, Ministry is running various training institutes where skill-based training is imparted so that they can earn their livelihood independently. There are 18 technology centres which are operational, some of them are as given below situated at various states in India.
- Employment Opportunity: Ministry of MSME has launched an online platform to develop skill-pool and enable trained youth to know about different employment opportunities. MSME Sampark is a digital portal where job seeker basically passed out trainees/students of MSME technology centre and institutes, register themselves to seek employment opportunities and recruiters register themselves to get skilled employees.
- Reservations in procurement: As per the public procurement policy for Micro and Small Enterprises (MSME) order 2012, each and every Central Ministry, Government Departments, Public sector undertakings (PSU) shall mandatorily procure 25 % of their annual purchases from MSME. (In the above 25%, minimum 3% reservation is for women owned MSEs.) Thus, Government provides back up support for MSME by marking reservations.
- Grievance Redressal: To protect the interest of MSME’s with respect to their delayed payment, the Government has constituted Micro and Small Enterprises Facilitation Council (MSEFC) which redress the grievances of MSME’s. These MSEFC are entrusted with the responsibility to resolve the disputes with regard to the pending payment of MSME’s and provide amicable solution for MSME’s. There are 36 states/UT’s where Micro and Small Enterprises Facilitation Council has been constituted.
- Payment Protection: Under section 18 of the MSMED Act 2006, MSE has power to raise their concern of delayed payments to Micro and Small Enterprises Facilitation Council (MSEFC). If buyer fails to make payment within the stipulated time line of 45 days then he will be liable to pay compound interest with monthly rest on the amount which was to be paid, calculated from the appointed day at three times of the interest notified by Reserve Bank of India.
Further Ministry of Corporate Affairs has also notified MSME Form to be filled by Companies on half year basis where they have delayed in making payments to MSME.
- Intellectual Property Rights: To enhance the competitiveness of the MSME sector, a scheme “Building Awareness on intellectual Property Rights (IPR)” for the MSME which also includes financial assistance for filing application for IPR protection.
Concluding above it can be easily said that MSME is not a hyped matter and it is future of India as it holds within power to stimulate the economy and reduce the existing disparity in the society.