Indian MSMEs and the Aatma Nirbhar Bharat Abhiyaan
Micro, Small and Medium Enterprises (also known as “MSMEs”) are amongst the most influential drivers of economic development, innovation, and employment in the country. MSMEs registered with the Udyog Aadhaar Memorandum indicate that micro enterprises constitute a majority, both in terms of number of enterprises (88 per cent) and personnel employed (62 per cent). A comprehensive package under the ‘Aatmanirbhar Bharat Abhiyaan’ of Rs. 20 lakh crore, i.e., about 10 per cent of the national GDP, has been announced for the revival of the Indian economy.
Numerous questions are being raised about the efficacy of the Package, with some clamouring that it hardly matches even 2 per cent of GDP. In this Package, there are some specific initiatives taken to support MSMEs. Majority of the recent steps taken to support MSMEs, such as credit guarantees to MSMEs, subordinate debt scheme, creation of a fund to infuse equity, global tenders banned up to Rs. 200 crore, e-market linkage, and CGTMSE, hardly benefit micro and small entrepreneurs.
Even the revision of the definition of an “MSME” hardly benefits micro and small enterprises as they are at the bottom of the pyramid. The overall mood of the small players in the Indian MSME sector remains pessimistic. In order to pragmatically address the challenges of micro and small enterprises, incisive, systematic and sustainable structural reforms are required.