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1. Empowering India’s Msme Sector

  • India is expected to emerge as one of the leading economies in the world over the next decade and the Micro, Small & Medium Enterprises (MSME) segment is expected to play a significant role. The development of this segment is extremely critical to meet the national imperatives of financial inclusion and generation of significant levels of employment across urban, rurban and rural areas across the country. Further, it can nurture and support development of new age entrepreneurs who have the potential to create globally competitive businesses from India.

  • MSME can be the backbone for the existing and future high growth businesses, with both domestic and foreign companies investing in the ‘Make in India’ initiative and making significant impact in the area of indigenisation. MSME should enable the development of a business ecosystem that enables and continuously support business that are gearing to deliver the right product, the right quality, the right solution and the right service at a competitive price, both in domestic and international markets.

  • It is equally important that the MSME segment develops in all areas of agriculture, manufacturing and services sectors because each of these sectors will continue to be very relevant to the overall GDP growth as well as employment generation. A catalyst for socio-economic transformation of the country, the sector is critical in meeting the national objectives of generating employment and discouraging rural-urban migration.

  • Of the many challenges impeding the growth and development of MSMEs, limited access to financial resources, lack of infrastructure support and inadequate linkages to domestic and global markets, etc. are few of the bottlenecks that make these enterprises vulnerable, particularly in the period of economic downturn.

 

1.1. MSME Amendment Bill, 2015

  • In 2016, there were more than 36 million such units providing employment to over 80 million persons, whilst contributing about 8 per cent to GDP, 45 per cent to the total manufacturing output, and 40 per cent to the exports from the country.

 

The Bill aims to

  • 1. Enhance the existing limit for investment in plant and machinery considering changes in price index and cost of inputs consistent with the emerging role of the MSMEs in various Global Value Chains

  • 2. Include medium enterprises apart from small enterprises in section 7(9) to enable the aforesaid category of enterprises to avail the benefits and become competitive

  • 3. Empower the Central Government to revise the existing limit for investment, by notification, considering the inflation and dynamic market situation

  • The investment limit prescribed for Micro, Small and Medium Enterprises (MSMEs) in the country, is proposed as under:

 

Manufacturing enterprises:

  • Micro enterprise Investment in plant and machinery: Not exceed fifty lakh rupees

  • Small enterprise Investment in plant and machinery: More than fifty lakh rupees but does not exceed ten crore rupee

  • Medium enterprise Investment in plant and machinery: More than ten crore rupees but does not exceed thirty crore rupees

 

Service enterprises:

  • Micro enterprise Investment in equipments: Not exceed twenty lakh rupees.

  • Small enterprise Investment in equipments: More than twenty lakh rupees but does not exceed five crore rupees

  • Medium enterprise Investment in equipments: More than five crore rupees but does not exceed fifteen crore rupees

 

Benefits:

  • Enhance the existing limit for investment in plant and machinery considering changes in price index and cost of inputs consistent with the emerging role of the MSMEs in various Global Value Chains,

  • Include medium enterprises apart from small enterprises in section to enable the aforesaid category of enterprises to avail the benefits and become competitive,

  • Empower the Central Government to revise the existing limit for investment, by notification, considering the inflation and dynamic market situation

 

2.Promotional Avenues For Msme’s

  • Creation of a dedicated bank for refinancing microfinance institutions (MFI)

 

Would lay down guidelines for

  • 1. Micro and small enterprise financing;

  • 2. Business, registration, regulation and accreditation of MFI entities;

  • 3. Promoting right technology solutions

  • 4. Formulating a credit guarantee scheme for loans given out to micro enterprises.

 

Development Commissioner (DCMSME) Schemes

  • 1. Credit Guarantee

  • 2. Credit Linked Capital Subsidy for Technology Upgradation

  • 3. ISO 9000/ISO 14001 Certification Reimbursements

  • 4. Micro & Small Enterprises ClusterDevelopment Programme

  • 5. Micro Finance Programme

  • 6. MSME Market Development Assistance (MDA)

  • 7. National Awards (Individual MSEs)

  • 8. National manufacturing Competitiveness Programme (NMCP)

  • i. Marketing Support/Assistance to MSMEs (Bar Code)

  • ii. Entrepreneurial and Managerial Development of SM Es through Incubators

  • iii. Enabling Manufacturing Sector to be Competitive through QMS & QTT

  • iv. Building Awareness on Intellectual Property Rights (IPR)

  • v. Learn Manufacturing Competitiveness for MSMEs

  • vi. Design Clinic for Design Expertise to MSMEs Manufacturing Sector (DESIGN)

  • vii. Marketing assistance & Technology Upgradation

  • viii. Technology and quality Upgradation Support to MSMEs NSIC Schemes

  • 1. Performance and Credit Rating

  • 2. Bank Credit Facilitation

  • 3. Raw Material Assistance

  • 4. Single Point Registration

  • 5. Infomediary Services

  • 6. Marketing Intelligence ServicesLease

  • 7. Bill Discounting

  • 8. NSIC Infrastructure

  • i. Exhibition Hall, Hyderabad

  • ii. IT Incubator

  • iii. Exhibition-cum-Marketing

 

Development Business Park

  • iv. software and technology and Business Parks

  • v. Exhibition Grounds, New Delhi

 

ARI Division Schemes

  • 1. P rime Minister’s Employment G e n e r a t i o n P r o g r amme (PMEGP)

  • 2. Janshree Bima Yojana for Khadi Artisans

  • 3. M arket Development Assistance (MDA)

  • 4. Science and technology Scheme

  • 5. Coir Udyami Yojan

  • 6. Coir Vikas Yojana

  • i. Export Market Promotion

  • ii. S kill Upgradation & and Mahila Coir Yojana

  • iii. Development of ProductionInfrastructure (DPI)

  • iv. Personal Accident Insurance Scheme for Coir workers

  • v. Trade and Industry Related Functional Support Services (TIRFSS)

  • vi. D omestic Market Promotion Scheme

  • 7. A spire (Scheme for promotion of innovation entrepreneurship and agro-industry)

  • 8. Revamped Scheme of Fund

  • for Regeneration of Traditional

  • Industries (SFURTI )

  • The government has also announced that loans to SMEs by public sector banks are to be brought under priority sector lending.

 

3. Enhancing Competitiveness Through Technology Upgradation

  • Technology refers to the efficient tools and implements and the knowledge associated with their use.

  • Or in other words technology refers to the knowledge whereby economic efficiency can be improved. Hence, it includes not only the "hard," possibly patentable, aspects of production, like the specifications of goods and the mechanistic details of their manufacture, but also the "soft" aspects of business processes, such as organization, marketing, and other types of managerial knowledge and skills.

  • Advantages of Technology Upgradation

  • Increase in Productivity

  • Reduction in costs.

  • Expansion of scale of production (scale economies).

  • Diversified product range(scope economies)

  • New product development.

  • New design products.

  • Better quality of products.

  • Penetration of international markets.

  • Increase in sales and markets share.

  • Means of Technology Upgradation for MSMEs

  • Sponsoring a research in a university.

  • Supporting employees' education and thereby assess candidate technologies,

  • Making use of an external R & D centre ,

  • Employing consultants to help them assess the new technologies available in the market,

  • Going for lisencing ,one of the widely utilised methods of technology acquisition,

  • Using technical meetings, technical journals and trade shows foe assessing alternative technologies,

  • Purchasing existing technology either trough the vendor/supplier or from any commercial channel.

  • Limited resources, expertise and time are the factors that push many firms to acquire technology from a source external to the firm rather than developing it in-house. The process of acquiring technology from external sources can be achieved through what is commonly known as "Technology Transfer".

  • In its most general meaning, "Technology Transfer" is seen as every process that aims at transferring technological know-how from a donor such as a university, a research Centre or R&D department of firms to a recipient - firms which may either directly use or co-develop the technology.

  • Technology Transfer is fundamentally the application of knowledge associated with a new physical hardware used by an MSME as machinery equipment in the production process for generating product/service which is quantitatively as well as qualitatively superior to what it was producing earlier.

 

3.1. Sources of Technology Transfer

  • Technology information and Technology assistance are provided by means of a Technology Bank maintained by the Development Commission for Micro, Small and Medium Enterprises in the Ministry of MSMEs, Government of India.

  • National Research Development Corporation (NRDC) which commercializes technologies, developed in Council for Scientific & Industrial Research (CSIR) labs located across the country, primarily helps MSMEs in Technology Transfer.

  • Cluster Development Program of National Manufacturing Competitiveness Program (NMCP).

  • A professional technical consultant (registered with Department of Scientific and Industrial Research (DSIR), Government of India) might help to identify and access to acquire an appropriate technology from within the country or abroad.

  • A university or an engineering institution (such as IITs/NITs/IISc or other engineering colleges), can provide lab developed technologies to MSMEs through contract research or which emerged out of their basic research. TIFAC-MSME Program facilitates such interactions.

  • An R&D establishment promoted by the government such as a Technology Research Centre (TRC), which can enable a MSME to source and acquire a technology either locally or from abroad.

  • India SME Technology Services Limited provides a platform where Micro, Small and Medium Enterprises (MSMEs) can tap opportunities at the global level for new and emerging technology or business collaboration.

  • Sponsor technical education and training of personnel in higher education and research institutes within the country for developing in-house technology expertise and thereby assess and access appropriate external technologies.

  • Participation in technology exhibitions, technology conferences and reading of technical journals and internet access for knowing sources and channels of available external technologies.

  • APCTT (a New Delhi based UN organization) periodically facilitates Technology Transfer among MSMEs in the Asia-Pacific region, through periodic events, support mechanisms and capacity building Programs.

  • Technology licensing - It is a contractual arrangement in which the licensor's patents, trademarks, service marks, copyrights, trade secrets, or other intellectual property may be sold or made available to a licensee for compensation that is negotiated in advance between the parties. This compensation, or royalties, may be a lump sum royalty, a running royalty (royalty that is based on volume of production), or a combination of both.

  • Definitions of Micro, Small & Medium Enterprises -  In accordance with the provision of Micro, Small & Medium Enterprises Development (MSMED) Act, 2006 the Micro, Small and Medium Enterprises (MSME) are classified in two Classes:

  • 1.Manufacturing Enterprises-The enterprises engaged in the manufacture or production of goods pertaining to any industry specified in the first schedule to the industries (Development and regulation) Act, 1951) or employing plant and machinery in the process of value addition to the final product having a distinct name or character or use. The Manufacturing Enterprises are defined in terms of investment in Plant & Machinery.

  • 2.Service Enterprises:-The enterprises engaged in providing or rendering of services and are defined in terms of investment in equipment..

  • The limit for investment in plant and machinery / equipment for manufacturing / service enterprises are as under

 

4. Quality Certification - Trigger Force For Competitiveness

4.1. Role of MSME

  • MSMEs are the engine of growth for Indian economy as this sector has been spreadingentrepreneurial culture in all parts of our country.

  • The contribution of MSME sector is 8% of GDP, 45% of manufacturing output and 40%of exports of the country.

  • Government of India's endeavor for inclusivity in this sector is admired as it has various schemes for entrepreneurs that include women, scheduled castes, scheduled tribes,marginalized communities, people with disabilities etc., for handholding and enabling them in creating enterprises.

  • What is the importance of Quality certification in MSMEs?

  • From the standpoint of policy makers,development of MSMEs can be vital increating new jobs besides introducing new services, products, processes and business model innovations.

  • Through quality management systems, networking and relationships with large enterprises it can refine and mass produce business innovations.

  • Quality certification is becoming extremely significant in competitive markets for gainingstrong foothold in exports.

  • Quality certifications are no longer restricted to large industries, MSMEs are increasingly coming forward to embrace need based quality certification. Competitive advantages for MSMEs reflect in higher productivity and profitability.

  • Quality certification to an organization canlead to the benefits like Recognition and brand reputation, Continual improvement,Maintain focus, Confidence, Staff satisfaction  and engagement.

 

Government interventions in promoting the Quality standards

  • Realizing the importance of MSMEs for economic development, Ministry of MSME has addressed the quality and technology aspects of manufacturing in MSMEs through various schemes and Programs for enhancing competitiveness of small businesses.

  • National Manufacturing Competitiveness Program (NMCP) -Under this Program ten schemes have been drawn up that includes promotion of ICT, mini tool room, design clinics and marketingsupport for SMEs.

  • This Program enables the manufacturingsector to be competitive through Quality Management Standard & Quality Tech. Tools(QMS/QTT).

  • Technology and Quality Upgradation Support to MSMEs - This schemeadvocates the use of energy efficient technologies in manufacturing units for reducing the cost of production and foradopting clean development mechanism.

  • Financial Support to MSMEs in ZED (Zero Defect Zero Effect) Certification Scheme - This scheme envisages to develop an Ecosystem for Zero Defect Manufacturing in MSMEs by promoting adaptation of Quality tools and Energy Efficient manufacturing.

  • This scheme also supports Make in India campaign. Under this scheme MSMEs willhave to compete to bag gold, silver or bronze quality certification in order to get contracts.

  • Financial assistance is provided to MSMEs for the activities to be carried out for ZEDcertification. This includes assessment / rating, gap analysis, handholding andconsultancy for improving the rating of MSMEs by consultants.

  • Quality Certifications - ISO Certification Assistance- ISO 9001 is the world's most widely recognized Quality Management System (QMS).

  • It helps organizations to meet the expectations and needs of their customers and stakeholders, amongst other benefits.

  • An ISO 9001 quality management system helps to continually monitor and manage quality across all operations and outlines ways to achieve consistent performance and service.

  • ISO international standards help MSMEs to work more efficiently as it has become the standard for most manufacturing companies.

  • Implementing the ISO 9001 standards involves cooperation and feedback from internal and external stakeholders.

  • Certain State Governments like Gujarat also runs many schemes for the promotion of quality standards in MSMEs.

 

5. Encouraging Environment For Small Enterprises

5.1. Impact of LPG on small Enterprises

  • Before the advent of the new economic policy in 1991, 812 items were reserved for production in the Small Scale sector. The New Economic Policy (NEP) storm mercilessly killed this policy of reservation.

  • Similarly, Small Industries were given preference in government procurement as well, both in terms of price and purchase preference. Slowly these concessions to SSIs vanished in the name of promoting competition.

  • It was argued that if we continue protecting domestic industry including Small Scale Industries, Foreign Investors would be discouraged and consumers' choices would be also hampered.

  • Policy of open imports in the era of globalization did help us in getting number of goods and sometimes even technology, but at the cost of closure of millions of Small Enterprises, which couldn't  face fierce competition from the rest of the world.

  • Though, in some sectors like automobile, we do find some growth in ancillary small scale units; however, Small Scale sector in general faced extinction especially due to import flood from China.

  • Huge import surge from China, not only caused huge burden of foreign exchange payment on the country due to heavy imports of toys, power equipment, mobile, computer and other electronics accessories, project goods, power plants etc., our industry and businesses were also destroyed, causing widespread unemployment.

 

Solution

  • Need for Separate Labor Laws – Small Enterprises, instead of hiring regular labor, have started shifting to contract labor.

  • Contract labor is exploited by the intermediaries and organic relationship between entrepreneur and the labor goes missing, affecting welfare of both entrepreneurs and workers.Given this problem, the Second Labor Commission gave an important recommendation to enact separate laws for Small Enterprises. Workers organizations also favored such initiative.

  • Sometime ago, a bill called 'Micro Small and Medium Enterprises Bill' was formulated. However, need to have separate labor laws for Small Enterprises remains.

  • Finance - Banks and other Financial Institutions feel that it's risky and cumbersome to lend to small enterprises. There is hardly any truth in this thinking, given the NPA crisis being faced by banks due to big loans turning bad.

  • Due to this preconceived notions of banks, they try to avoid lending to Small Enterprises, even circumventing their legal binding of priority lending to Small Enterprises.

  • Further, Small Enterprises get loans at higher interest rates, whereas big borrowers get loan at much cheaper rates and on more easy terms, without hassles.

  • After the current government took over the rein of power, it has tried to facilitate Small and Micro Enterprises through Micro Units Development and Refinance Agency (MUDRA), Startup schemes etc.

  • Restricting Flooding and Dumping of Imports - Although foreign trade is a normal phenomenon in modem days, however, it has been a major cause for distress to Small Enterprise.

  • Reason is dumping by some foreign countries, especially China. Central government has now started imposing Anti-Dumping Duty in a big way.

  • We find that the imposition of anti-dumping duties on some items in the year 201 6-17 yielded desirable results. Now since, on many other items of imports from China antidumping duty has been imposed, it is expected that in the current year imports from China will further decline.

  • Preference in Government Procurement In order to protect and promote small enterprises, there used to be a clear and comprehensive policy of preferential procurement from SSIs, which used to take the form of price preference or purchase preference. However, with the passage of time, these preferences were more or less weaned away.

  • Recently, a new preferential procurement policy has been made by the government, implemented by making General Financial Rules (GFR). Rule 153 of GFR states:

  • "In procurement of goods for Rs. 50 lakhs and less, and where the Nodal Ministry determines that there is sufficient local capacity and local competition, only local suppliers will be eligible.

  • For procurements valued at more than Rs. 50 lakhs ( or where there is insufficient local capacity/ competition) if the lowest bid is not from a non-local supplier, the lowest-cost local supplier who is within a margin of 20 per cent of the lowest bid, will be given the opportunity to match the lowest bid."

  • It is expected that preferential procurement of domestic goods would go a long way in encouraging domestic industry in general and Small Scale Industry in particular.

  • Ending Inspector Raj - There are more than 40 laws applicable on SSIs and more than 50 Inspectors visit their factories, and many of them have wide ranging powers to penalize SSIs.

  • Living under these threats, SSIs find it difficult to concentrate on core areas like production, marketing and up gradation of technology.

  • There are many such laws which have lost utility in modem times, and there are many others which come in way of healthy functioning of the economy in general and industry in particular.

  • There is a need to facilitate new entrepreneurs by single window clearances of all types. Some states have initiated this process.

  • As more and more state governments are going online, this process will further accelerate. Under new initiatives for Startups, online clearances are already being given.

  • Building Infrastructure – Almost impossible to start and run Small Enterprises in a remote area. They are neither connected with rail or road; nor do they have assured source of power.

  • Even in big and developed places, assured power supply is a big issue. At many places, generators are under rampant usage. This not only raises cost, but is a source of pollution and units equipped with generators are subject to exploitation by concerned departments' inspectors.

  • There is need to develop infrastructure of various kinds including rail, road, power, skill development, markets (including e-portals) etc.

  • Universal electrification of villages, boost being given to solar energy, fast tract building of roads by the present government is expected to help promotion to small scale and tiny industries, especially in rural areas. Eprocurements have also started by the government.

 

6. Enabling Ease Of Access To Msme Products

  • MSMEs in India are defined on the basis of the investments made in plant and machinery, according to the MSME Development Act of 2006.

  • At the present juncture, when the need to create jobs is the most important task of governance, there is a need to radically redefine the norms for categorisation of the MSME sector, by only taking the number of employees into account.

 

The German way

  • Germany, one of the few growth engines of the world today, is a shining example of the difference that such a great thrust for MSMEs can make. The German Federal Ministry for Economic Affairs and Energy has stated that it has accepted the definition of SMEs as businesses with an annual turnover of less than €50 million and with fewer than 500 employees.

  • In Europe, an SME has been defined by the European Commission as being a company with fewer than 250 employees and an annual turnover of less than €50 million (or total assets of less than €43 million).

  • Sentiment index for MSME sector

  • The sentiment index, named as CriSidEx, is expected to provide crucial insights into employment, business environment and foreign trade in the MSME sector.

  • Provide crucial insights into employment, business environment and foreign trade

  • Provide intelligence and insights for regulators, trade bodies, lenders as well as economic & financial analysts.

  • Help in forecasting the business environment because it will capture sentiment on various business parameters such as the business situation, capacity utilisation, order book and margins. It will flag potential headwinds and changes in production cycles and thus help improving market efficiencies

  • Concerted efforts required to utilize the potential of Demographic Dividend in India’s lap

  • Small enterprises are known to support the vitality of markets by complementing large-scale industries, providing a large number of low-cost jobs (especially for low- or medium-skilled workers), creating wealth by contributing appropriately to the GDP, and going on to become large enterprises in the future. Therefore, it is imperative for the government to build competitiveness in this sector.

 

Thrust in policy reforms:

  • Ease of starting and exiting business

  • Single window system for approval

  • Relaxation of Foreign investment norms

  • Need to simplify Legal Governance

  • Sick enterprises should be given one time settlement (OTS) facility by the banks before enforcing measures under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act.

  • There is need to abolish licensing of all kinds including municipal/local authorities licences for businesses that employ, say, five in rural and semi-urban centres and 10 in urban centres, totally.

  • E-Governance: Different procedures and lack of mutual trust leads to hidden costs and slow paralysis

  • Strengthen the communication between stakeholders

  • Establish a proper procedure pan-India

  • Improve efficiencies in service delivery

  • Public Participation to be enhanced via the integration of Social Media

  • Building up of a database to measure the levels of productivity of the products

  • Identification of products in need of research and development

 

7. Accessing Finance: Challenge To The Msmes

  • Massive need for providing adequate infrastructure:

  • Deficiencies in basic infrastructural facilities like water, power supply, road/rail and telephone connectivity, etc. should be addressed on priority basis.

  • Use of solar or renewable energy as an alternative source should be encouraged in rural areas on subsidized basis.

  • A cluster-centric or cluster development approach should be adopted for a number of enterprises working in closer proximity.

  • Continued supply of credit: Currently despite the best efforts, 40 percent still rely on the informal sources for funds. There needs to be a concerted effort to provide funds for these sources.

  • Financial Education of the borrowers for empowerment

  • Statutory guidelines to stipulate penalties or interest for big corporations which delay payments to SMEs

  • Skill development for bankers :

  • Standardising simple format for accounting purposes for MSMEs,

  • Competent development of human resources,

  • Cultivating business ethics and standards, and

  • Imparting training to MSMEs

  • PMJDY needs to be utilized so that financial resources can be directed towards targeted MSMEs.

  • Adopt a programme like the Small Business Innovation and Research (SBIR): Under SBIR, governments disburse funds on a competitive basis to small enterprises and help them build their R&D capabilities. Improving R&D will boost innovation and make enterprises more competitive. As a result, they will generate higher employment and will be more productive with improved products and services. In fact, SBIR in the US has helped small businesses secure over 67,000 patents since its inception. Apple, Chiron, Compaq and Intel have been the early beneficiaries of SBIR.

  • Employment Generation & Skill Development: MSMEs are labour-intensive and have the capability to create more jobs to cater to a young demographic country like India, where the climatic vagaries render many unemployed in the agricultural sector.

  • Training of educated unemployed youth both in conventional and most advanced production and management technology/processes

  • Developing Modular Courses and training of trainers

  • Developing districts wise skill development needs and training providers.

  • Up-scaling in collaboration with NSDC, Ministry of Skill Development, Entrepreneurship, Youth Affairs and Sports and Ministry of Labour and Employment

  • Providing adequately trained and skilled manpower: With more and more sophisticated machinery usage, the industry needs have shifted to highly skilled operators and there needs to be a seamless supply in the near future. Skill programmes through the National Skill Development Agency & National Council on Vocational Training could potentially help bridge this skill gap.

  • Recent initiatives taken by government to encourage MSME

  • India Aspiration Fund (IAF):

  • India Aspiration Fund (IAF) would invest in venture capital funds for meeting the equity requirement of MSME start-ups

  • Life Insurance Corp. of India (LIC) will be a partner and co-investor in this fund.

  • SIDBI Make in India Loan for Enterprises (SMILE):

  • It is a debt-fund which will carter soft term loans to MSMEs to meet debt-to-equity norms and pursue growth opportunities.

  • SIDBI has set Initial corpus of Rs. 10, 000 crore under SMILE fund.

  • Scheme of Fund for Regeneration of Traditional Industries (SFURTI):

  • To develop clusters of traditional industries in various parts of the country

  • To make traditional industries more competitive with more market-driven, productive, profitable and sustained employment for traditional industry artisans and rural entrepreneurs

  • To strengthen the local governance systems of industry clusters, with the active participation of the local stakeholders, so that they are enabled to undertake development initiatives by themselves

  • Prime Minister Employment Generation Programme (PMEGP)

  • A credit linked Scheme to facilitate participation of financial institutions for higher credit flow to micro sector.

  • Its objectives are to generate continuous and sustainable employment opportunities in Rural and Urban areas of the country through start-ups.

  • Udyog Aadhaar Memorandum (UAM): a simple one-page registration Form. This is an important step to promote ease of doing business for MSMEs in India as the UAM replaces the filing of Entrepreneurs’ Memorandum with the respective States/UTs.

  • Framework for revival and rehabilitation of MSMEs: Provides a mechanism for revival and rehabilitation with a definite voice to the Entrepreneurs and is expected to balance the interest of debtors and creditors.

  • A Scheme for Promoting Innovation, Rural Industry and Entrepreneurship (ASPIRE): To promote Innovation & Rural Entrepreneurship through rural Livelihood Business Incubator (LBI), Technology Business Incubator (TBI) and Fund of Funds for start-up creation in the agro-based industry.

  • National Small Industries Commission (NSIC) under the Ministry of MSME is implementing the Raw Material Assistance Scheme which aims at helping MSEs by way of financing the purchase of Raw Material (both indigenous & imported).

  • Credit Guarantee Fund Scheme for Micro and Small Enterprises (MSEs): To facilitate easy flow of credit to Micro, Small and Medium Enterprises

  • Credit Guarantee Fund Trust for Micro and CGTMSE Scheme: CGTMSE was set up to strengthen credit delivery system and facilitate flow of credit to the MSE sector. It seeks to reassure the lender that, in the event of a MSE unit, which availed collateral free credit facilities, fails to discharge its liabilities to the lender; the CGMSE would make good the loss incurred by the lender up to 85 per cent of the credit facility.

  • Credit Linked Capital Subsidy Scheme (CLCSS) for Technology Upgradation: CLCSS aims at facilitating technology upgradation of Micro and Small Enterprises (MSEs) by providing 15% capital subsidy (limited to maximum Rs.15 lakhs) for purchase of Plant & Machinery.

  • Trade Receivable e-Discounting System (TReDS): TReDS is an institutional mechanism for facilitating the financing of trade receivables of MSMEs through multiple financiers. TReDS will facilitate by creating an electronic platform / Electronic Bill Factoring Exchanges,

  • whereby MSME bills against large companies can be accepted electronically and auctioned, to ensure prompt realisation of receivables at competitive rates.

  • Financial Support to MSMEs in ZED Certification Scheme: The objective of the scheme for promotion of Zero Defect and Zero Effect (ZED) manufacturing amongst micro, small and medium enterprises (MSMEs) and ZED Assessment for their certification so as to:

  • Develop an Ecosystem for Zero Defect Manufacturing in MSMEs.

  • Promote adaptation of Quality tools/systems and Energy Efficient manufacturing.

  • Enable MSMEs for manufacturing of quality products.

  • Encourage MSMEs to constantly upgrade their quality standards in products and processes.

  • Drive manufacturing with adoption of Zero Defect production processes and without impacting the environment.

  • Develop professionals in the area of ZED manufacturing and certification.

  • Niryat Bandhu Scheme: To reach out to the new and potential exporters including exporters from Micro, Small & Medium Enterprises (MSMEs) and mentor them through orientation programmes, counselling sessions, individual facilitation, etc., on various aspects of foreign trade to enable them to get into international trade and boost exports from India.

  • Additionally, the Insolvency and Bankruptcy code (IBC) has been enacted and Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act (SARFAESI) and The Recovery of Debts due to Banks and Financial Institutions (RDDBFI) Act have been amended to improve resolution/recovery of bank loans. Six new Debt Recovery Tribunals (DRTs) have been established for improving recovery.

  • It is time to connect the dots

  • 1. Can virtual clusters launched by the Ministry of Micro, Small and Medium Enterprises supplement the existing physical clusters? Critically examine.

  • 2. Write a short note on MUDRA Bank.

  • 3. Amid all the noises surrounding the issue of GI, the hoarse history of neglecting our traditional artisans and workers, fail to ring bells. Is it possible to establish synchronization between the empowerment of our craftsperson and MSME? Suggest a way forward.

  • 4. Can inclusive growth of small enterprises be considered as means to generate jobs and elevate people out of poverty? Comment.

  • 5. What is a micro, small and medium enterprise all about? Mention the recent initiatives taken by the government to encourage small enterprises and also throw light on how can these small enterprises add value in a big way to India’s growth story?

  • 6. A big challenge faced by the MSME sector in India is regarding the definition of what constitutes micro, medium and small units both in manufacturing and services. Discuss briefly what the issue is about and how it hampers the growth of the sector.

  • 7. “In every progressive economy, there has been a steady shift of employment and investment from the essential primary activities to secondary activities of all kinds and to a still greater extent into tertiary production”. In the light of the current initiatives taken for the revival of MSME’s, comment on the statement with your opinion on the burgeoning signs of distress and the disequilibrium of employment present amongst the three sectors.

  • It is time to connect the dots

  • 1. Can virtual clusters launched by the Ministry of Micro, Small and Medium Enterprises supplement the existing physical clusters? Critically examine.

  • 2. Write a short note on MUDRA Bank.

  • 3. Amid all the noises surrounding the issue of GI, the hoarse history of neglecting our traditional artisans and workers, fail to ring bells. Is it possible to establish synchronization between the empowerment of our craftsperson and MSME? Suggest a way forward.

  • 4. Can inclusive growth of small enterprises be considered as means to generate jobs and elevate people out of poverty? Comment.

  • 5. What is a micro, small and medium enterprise all about? Mention the recent initiatives taken by the government to encourage small enterprises and also throw light on how can these small enterprises add value in a big way to India’s growth story?

  • 6. A big challenge faced by the MSME sector in India is regarding the definition of what constitutes micro, medium and small units both in manufacturing and services. Discuss briefly what the issue is about and how it hampers the growth of the sector.

  • 7. “In every progressive economy, there has been a steady shift of employment and investment from the essential primary activities to secondary activities of all kinds and to a still greater extent into tertiary production”. In the light of the current initiatives taken for the revival of MSME’s, comment on the statement with your opinion on the burgeoning signs of distress and the disequilibrium of employment present amongst the three sectors.

Yojana November 2017

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