Challenges related to MSME

 

Challenges related to MSME

 

Reference:

  • If any enterprise does not adapt itself to today's advanced technology, it lags behind in industrial competition, but due to the high cost of these technologies, small industries are unable to use them, which affects their production.The quality of their product falls and their supply chain is also affected.
  • It is very important to have strong and self-reliant MSMEs to further strengthen and accelerate the economy.
  • To achieve the target of five trillion economy, it is very important to strengthen the MSME sector, because this sector not only creates employment for itself, but also provides employment to crores of people of the country.

About MSME:

  • Micro, Small and Medium Enterprises ie MSMEs are considered to be the backbone of the Indian economy. 30 percent of the country's industrial production comes from the MSME sector.
  • They contribute 48 percent to the total exports.
  •  In terms of employment, this sector plays an important role in the socio-economic development of the country by generating maximum employment at low capital cost after agriculture.
  • About 11 crore people get employment from these industries.

Challenges related to MSME

  • The biggest problem is that this industry lacks resources.
  • Entrepreneurs in the MSME sector neither have much financial capital nor do they have any good understanding of business like large entrepreneurs.
  • Most of the micro and small scale industries are located in rural areas or towns, so they face problems of infrastructural facilities like electricity, roads, water etc.
  • The development of micro, small and medium enterprises depends on factors such as their access to the market, quality of products, timely availability of credit and upgradation of technology.
  • Small enterprises faced some problems in the initial phase of GST implementation, which affected the supply side of raw materials.
  • One problem is that more than forty percent of entrepreneurs in this sector do not have access to formal sources of finance, that is, they are unable to take loans from the banking sector.
  • Due to non-availability of raw material they are not able to supply the goods on time.

Efforts of Government of India for the upliftment of MSMEs:

Covid-19 has badly affected this sector. Government of India has made several efforts for the upliftment of MSMEs:

  • Implementation of various schemes by Government of India and Ministry of MSME for capacity building of Indian MSME sector for skill development, technology upgradation, marketing support and access to credit to MSMEs.
  • A good initiative has been taken by the government that whatever purchases will be made by the central government ministry, its department or public sector companies, twenty five percent should be purchased from MSME industries only.
  • Launching of a portal called 'Udyam Registration' to make it easier to do business and get the enterprise registered very easily.
  • Creating employment opportunities by the government by setting up MSME enterprises in rural and urban areas under the Prime Minister's Employment Generation Program.
  • Providing credit linked subsidy by the government.
  • Providing financial assistance under the scheme of Fund for Upgradation and Reconstruction of Traditional Industries to organize artisans and traditional industries into clusters to make them competitive in business.
  • To provide Credit Guarantee Scheme loan facility for micro and small scale industries. Under this, guarantee-free loans are provided to small entrepreneurs.
  • Running 'Micro and Small Enterprises Cluster Development Programme' to promote productivity, competitiveness as well as capacity building of small entrepreneurs.
  • Government of India has launched Raw Material Assistance Scheme in association with National Small Industries Corporation (NSIC).
  • Under this scheme, financial loans are provided to the distressed MSMEs for the purchase of raw materials.
  • In order to enhance the efficiency of MSMEs, along with improving productivity, the Ministry of MSME has set up Common Facility Centers (CFCs).
  • Under this, efforts are made to enhance technology, market access, skill and quality by mitigating the major problems of these enterprises.

Suggestion:

  • It is very important to have some basic requirements to start any enterprise.
  • Law and order should be good and strong in industrial areas, only then an entrepreneur can do his business fearlessly.
  • Anarchic elements and corrupt people should be controlled.
  • Uninterrupted supply of electricity is necessary for good production.
  • For the development of industries, good roads and proper transport system should be there.
  • The government should set up more and more training centers to prepare skilled workers in the MSME sector.
  • Black marketing of raw materials should be stopped, so that the businessmen are not harmed.
  • One of the major problems faced by small entrepreneurs is delayed payments. Government purchases are huge in the country and unless payments are made for goods sold from government entities, the entire supply chain slows down. That's why there is a need to pay attention to this also.
  • MSME sector can play a huge role in the field of exports. For this, more capital and infrastructure is needed, in which the government should give full support.
  • The government should give a big economic package to strengthen and promote the MSME sector.
  • At the same time, there is a need to pay more attention to employment generation and prepare a new national employment policy.
  • Technological centers should be established to make self-reliant in manufacturing.
  • Efforts should be made to increase the availability of raw material for micro enterprises.
  • Banks should be liberal in providing loans to MSMEs and there should be no delay in giving loans after approval, this should also be arranged.

Conclusion:

  • In a country like India with a population of around 135 crores, the MSME sector plays a vital role in the economy.
  • It promotes entrepreneurship and creates huge employment opportunities.
  • MSMEs help in reducing the problem of disguised unemployment in rural areas by absorbing additional agricultural labour.
  • MSMEs also complement large industries in the form of ancillary units and also play an important role in the entire eco-system of secondary and tertiary sector.
  • Therefore, along with the Government of India, the states should also ensure the overall development of micro, small and medium enterprises and their access to the market.

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