Dr. Nagabhushana.

S,
Govt. First Grade College
Harohalli, Ramanagara District
 Agenda
• Appointment, removal, fixation of remuneration, rights,
responsibilities and liabilities of directors.
MSME

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 An overview of MSME
The Indian MSME sector
✓ An
✓ An Overview
Overview The The Indian
Indian MSME
MSME sector
sector isis the
the backbone
backbone of of the
the national
national economic
economic structure
structure and
and has
has unremittingly
unremittingly acted
acted asas the
the bulwark
bulwark for
for the
the Indian
Indian economy,
economy,
providing
providing itit resilience
resilience to to ward
ward off
off global
global economic
economic shocks
shocks and and adversities.
adversities.
✓ With
✓ With around 51.1 million units throughout the geographical expanse of
around 51.1 million units throughout the geographical expanse of the
the country,
country, MSMEs
MSMEs contribute
contribute around
around 7% 7% of
of the
the manufacturing
manufacturing GDP GDP and
and 31%31% ofof the
the GDP
GDP
from
from service
service activities
activities as as well
well as
as 37%
37% ofof India's
India's manufacturing
manufacturing output.output.
✓ They
✓ They have
have been
been ableable toto provide
provide employment
employment to to around
around 120
120 million
million persons
persons andand contribute
contribute around
around 46%
46% of of the
the overall
overall exports
exports from
from India.
India. The
The sector
sector hashas consistently
consistently
maintained
maintained aa growth
growth rate rate of
of over
over 10%.
10%.
✓ About
✓ About 55.3%
55.3% of of the
the MSMEs
MSMEs are are based
based outout ofof rural
rural areas,
areas, which
which indicates
indicates thethe deployment
deployment of of significant
significant rural
rural workforce
workforce inin the
the MSME
MSME sector
sector and
and isis an
an exhibit
exhibit to
to the
the
importance of these enterprises in promoting sustainable and inclusive development as well as generating large scale employment,
importance of these enterprises in promoting sustainable and inclusive development as well as generating large scale employment, especially in the rural areas. especially in the rural areas.
✓ National Policy
✓ National Policy forfor manufacturing
manufacturing envisages
envisages aa contribution
contribution of of manufacturing
manufacturing sectorsector from
from 16%
16% toto 25%
25% inin India’s
India’s GDP
GDP byby 2022.
2022.
MSME

✓ After
✓ After Agriculture,
Agriculture, this this sector
sector generates
generates largest
largest employment.
employment.
✓ AA growth
✓ growth inin MSME
MSME sector sector can
can ensure
ensure industrialization
industrialization inin thethe backward
backward areasareas also.
also. They
They have
have already
already become
become the the nursery
nursery ofof innovation
innovation andand entrepreneurship.
entrepreneurship.
✓ They
✓ They are
are dispersed
dispersed widely widely throughout
throughout thethe country
country andand produce
produce aa diverse
diverse range
range of
of products
products and
and services
services to to meet
meet the
the demands
demands of of the
the national
national && international
international value
value
chains, local and the global
chains, local and the global market. market.
✓ They help
✓ They help inin generating
generating foreign
foreign exchange
exchange for for the
the country.
country.
✓ Active
✓ Active participation
participation has has been
been observed
observed by by this
this sector
sector for
for the
the last
last fifty
fifty years.
years.
✓ This
✓ This sector
sector does
does notnot require
require huge
huge investment
investment by by any
any entrepreneur.
entrepreneur.

Key Focus
✓ Inspite
✓ Inspite of
of this
this fact
fact that
that there
there isis immense
immense potential
potential inin this
this sector,
sector, yet
yet itit suffers
suffers from
from various
various constraints
constraints to
to its
its growth.
growth. There
There isis always
always inadequate
inadequate capital
capital infusion
infusion with
with
insufficient
insufficient data
data for
for credit
credit requirement.
requirement. PoorPoor infrastructure
infrastructure and and inadequate
inadequate marketmarket linkage
linkage are
are the
the constraints
constraints inin the
the growth
growth of of MSME.
MSME. ItIt suffers
suffers because
because of of high
high cost
cost
of
of credit
credit which
which even
even does
does notnot reach
reach onon time,
time, non-availability
non-availability of of collaterals
collaterals inin the
the hands
hands of
of entrepreneurs,
entrepreneurs, legal
legal hassles
hassles inin getting
getting licenses,
licenses, taxation
taxation (Both
(Both direct
direct and
and
indirect) constrains. Non financing is the result of Illiteracy/Ignorance/inability/un-willingness to share information. Mindset of the individuals
indirect) constrains. Non financing is the result of Illiteracy/Ignorance/inability/un-willingness to share information. Mindset of the individuals working in unorganized working in unorganized

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sector
sector may
may also
also be
be one
one ofof the
the reason
reason for
for backwardness
backwardness and and poor
poor growth.
growth.
 SME trends in India
AP Service Assurance
MSMEs as the driver of socio-
economic development of the
country is set to see certain
trends, some upcoming and
some established, that will play
out in 2017, touted to be an
interesting year.
Key trends
✓ Flourishing amidst a challenging environment, the Small and Medium Enterprises ( SMEs) of India experienced several highs
and lows in the past few years.
✓ With the Indian economy expected to emerge as one of the leading economies in the world and likely to become a $5 trillion
economy by 2025, major impetus is being given to strengthen the backbone of our economy - the SME sector.
Comprehending the significance of the SME sector vis-a-vis lending numbers to the job market, contribution to GDP and
fostering entrepreneurship and innovation, numerous initiatives by our current government have been the highpoints.
Important developments in 2015-2016
✓ Working in tandem with the larger goal of pushing for economic growth, the implementation of many reforms made the
SME/start-up space relatively bullish in 2016 but not necessarily elated.
✓ These include re-implementation of Public Procurement Policy, Pradhan Mantri MUDRA Yojana, Make in India, Startup India,
and Skill India.
✓ Aimed at increasing growth of manufacturing sector by 12-14% per annum and increase its share of GDP to 25% by 2025,
the government plans to make financial and technical support more accessible.
✓ Also, the announcement to implement GST Bill in 2017 is a landmark decision that will help solve long existing challenges
prevalent in the current taxation system.
✓ For SMEs, GST bill will help eradicate indirect taxes, have more transparency of tax process, draw projections of production
cost and gain easy access to new geographies for business expansion.
✓ MSMEs as the driver of socio-economic development of the country is set to see certain trends, some upcoming and some
established, that will play out in 2017, touted to be an interesting year. Those who will survive the trenches of moves like
demonetisation are most likely to witness a smoother course ahead.
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 MSME

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 Issues & Challenges
Despite
Despite the
the pivotal
pivotal role
role and
and strategic
strategic importance
importance inin the
the context
context of of industrial
industrial development
development andand economic
economic growth
growth of of the
the country,
country, the
the MSME
MSME sector
sector experiences
experiences several
several
constraints
constraints and
and challenges.
challenges. Several
Several keykey issues
issues remain
remain to to be
be addressed
addressed properly
properly and
and measures
measures yet yet toto bebe taken
taken inin the
the interest
interest of of sustainable
sustainable industrial
industrial
development.
development. The Committee on financial architecture of MSME sector in their Report submitted in the February, 2015 have identified some key issues16. These
The Committee on financial architecture of MSME sector in their Report submitted in the February, 2015 have identified some key issues16. These
include;
include;
i)i) Equity
Equity as
as aa source
source ofof financing
financing isis underutilized
underutilized andand the
the prevalence
prevalence of of investment
investment by by venture
venture capital
capital and
and angel
angel investors
investors isis low,
low,
ii)ii) MSMEs
MSMEs face face the
the problem
problem of of delayed
delayed payments
payments from from their
their buyers
buyers whichwhich adversely
adversely impacts
impacts their
their working
working capital
capital as
as well
well asas their
their next
next cycle
cycle of
of production,
production,
iii)
iii) MSMEs
MSMEs lack lack adequate
adequate information
information about
about various
various schemes
schemes and and benefits
benefits available
available by
by the
the government,
government,
iv) Financial institutions/Banks face challenges in credit risk assessment
iv) Financial institutions/Banks face challenges in credit risk assessment of MSMEs, of MSMEs,
v)
v) The The utilization
utilization of of the
the available
available credit
credit guarantee
guarantee and and insurance
insurance schemes
schemes by by banks
banks has has been
been low.
low. Some
Some of of the
the major
major challenges
challenges confronted
confronted by by these
these
MSME

enterprises
enterprises include;
include; lacklack ofof adequate
adequate credit
credit and
and capital,
capital, poor
poor and
and inadequate
inadequate infrastructural
infrastructural facilities,
facilities, inadequate
inadequate accessaccess and and marketing
marketing linkages,
linkages,
technological
technological obsolescence
obsolescence and and inadequate
inadequate application
application of of new
new technology,
technology, lack
lack ofof skilled
skilled human
human resources,
resources, dilatory
dilatory and
and cumbersome
cumbersome regulatory
regulatory practices
practices
for
for clearance
clearance and and poor
poor adaptability
adaptability to to emerging
emerging international
international trends.
trends. This
This calls
calls for
for the
the need
need forfor strategic
strategic intervention
intervention to to improve
improve coordination
coordination and and
linkages between various stake-holders including the Government, industries and other agencies/associations
linkages between various stake-holders including the Government, industries and other agencies/associations working in this field. working in this field.

i.i. Lack
Lack ofof Adequate
Adequate Capital
Capital and
and Credit
Credit :: One
One of
of the
the greatest
greatest challenges
challenges which
which constrain
constrain the
the growth
growth of
of MSMEs
MSMEs inin our
our country
country relates
relates toto inadequate
inadequate capital
capital
and
and credit
credit facilities.
facilities. Easy
Easy and
and timely
timely access
access toto credit
credit isis crucial
crucial factor
factor toto development
development and and growth
growth of of enterprises.
enterprises. The The Report
Report of
of the
the Working
Working Group
Group on
on
Rehabilitation
Rehabilitation ofof sick
sick MSMEs
MSMEs byby the
the Reserve
Reserve Bank
Bank ofof India
India has
has identified
identified this
this situation
situation as
as aa crucial
crucial reason
reason for
for industrial
industrial sickness
sickness ofof this
this sector.
sector. Complex
Complex
collaterals
collaterals instead by the banks, cumbersome sanction procedures and delay in disbursement and high rate of interest on term loans further worsen
instead by the banks, cumbersome sanction procedures and delay in disbursement and high rate of interest on term loans further worsen
the situation.
the situation.

ii.
ii. Poor
Poor and
and Inadequate
Inadequate Infrastructural
Infrastructural Facilities:
Facilities: Deficiencies
Deficiencies inin the
the infrastructure
infrastructure and
and poor
poor support
support facilities
facilities marked
marked by
by inadequate
inadequate access
access to
to basic
basic facilities
facilities
like
like water,
water, power
power supply,
supply, road/rail
road/rail connectivity
connectivity etc.
etc. adversely
adversely affect
affect this
this sector
sector and
and contribute
contribute to
to enhance
enhance their
their operational
operational cost
cost by
by rendering
rendering the
the MSMEs
MSMEs less less
competitive in the challenging market situations.
competitive in the challenging market situations.

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 Issues & Challenges
iii.
iii. Inadequate
Inadequate Access
Access and
and Marketing
Marketing Linkages
Linkages:: Poor
Poor marketing
marketing linkages
linkages characterized
characterized by
by inadequate
inadequate Government
Government support
support and
and patronage,
patronage, lack
lack of
of adequate
adequate
marketing
marketing infrastructure/
infrastructure/ network
network facilities
facilities continue
continue to
to be
be aa greater
greater challenge
challenge for
for marketing
marketing and
and sale
sale of
of MSME
MSME products.
products. In
In aa non-cluster
non-cluster situation,
situation, these
these
enterprises get segregated and are unable to ensure reduction in procurement cost from big companies and fail to streamline the output-supply
enterprises get segregated and are unable to ensure reduction in procurement cost from big companies and fail to streamline the output-supply chain.\ chain.\

iv.
iv. Lack
Lack of
of Skilled
Skilled Human
Human Resources
Resources:: Non-availability
Non-availability of
of skilled
skilled workforce
workforce and
and better
better managerial/entrepreneurial
managerial/entrepreneurial expertise
expertise at
at affordable
affordable cost
cost near
near the
the location
location
of
of enterprises
enterprises isis another
another such
such big
big challenge
challenge for
for the
the MSMEs
MSMEs inin our
our country.
country. Lack
Lack of
of managerial
managerial competence,
competence, absence
absence of
of proper
proper training
training on
on resource
resource planning
planning
and
and capital
capital management
management etc.
etc. hinders
hinders the
the growth
growth of
of enterprises.
enterprises.

v.v. Lack
Lack of
of Access
Access to
to New
New Technology
Technology:: Most
Most ofof the
the industries
industries today
today require
require application
application ofof advanced
advanced technology
technology inin their
their operations
operations whereas
whereas inin the
the Indian
Indian
MSME

context
context continuance
continuance of
of low
low technology
technology base
base results
results inin low
low productivity
productivity by
by making
making these
these enterprises
enterprises uncompetitive
uncompetitive inin the
the ever-widening
ever-widening market
market contexts.
contexts. Apart
Apart
from
from enhancing
enhancing productivity
productivity and
and quality,
quality, new
new technology
technology shouldshould be
be adopted
adopted for
for an
an overall
overall transformation
transformation and
and competitive
competitive edge.
edge.

vi.
vi. Dilatory
Dilatory and
and Cumbersome
Cumbersome Regulatory
Regulatory Practices
Practices :Cumbersome
:Cumbersome and and dilatory
dilatory regulatory
regulatory clearances
clearances relating
relating to
to sanction
sanction and
and disbursement
disbursement ofof loans
loans from
from
commercial
commercial banks, collateral securities/guarantees, for construction permits, resolving insolvency and taxation etc. continue to be the constraining factors for
banks, collateral securities/guarantees, for construction permits, resolving insolvency and taxation etc. continue to be the constraining factors for
many
many MSMEs.
MSMEs. Absence
Absence of of aa common
common regulatory
regulatory body
body and
and inadequate
inadequate provisions
provisions for
for start-ups
start-ups affect
affect the
the growth
growth ofof such
such enterprises.
enterprises. Non-adherence
Non-adherence to to RBI
RBI
guidelines
guidelines regarding
regarding revival/rehabilitation
revival/rehabilitation of
of seek
seek enterprises
enterprises byby the
the Banks
Banks isis another
another such
such constraint
constraint that
that needs
needs toto be
be addressed.
addressed.

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 Growth Opportunities & Potentials
Micro,
Micro, Small
Small andand Medium
Medium Enterprises
Enterprises have have substantially
substantially contributed
contributed to to the
the economic
economic development
development of of our
our country.
country. The
The MSME
MSME sector
sector inin India
India occupies
occupies the
the second
second
position
position next
next alone
alone to to agriculture
agriculture inin terms
terms of
of employment
employment generation.
generation. This
This sector
sector accounts
accounts for
for about
about 95%
95% ofof the
the industrial
industrial units,
units, 45%
45% of of manufacturing
manufacturing output,
output, 40%
40% of
of
exports total exports of the country. MSMEs have greater opportunities to grow as ancillary industries to unleash higher
exports total exports of the country. MSMEs have greater opportunities to grow as ancillary industries to unleash higher industrial growth. MSMEs being less industrial growth. MSMEs being less
capital
capital intensive
intensive and and more
more employment-friendly
employment-friendly have have easier
easier access
access to to raw
raw materials,
materials, subsidies
subsidies and
and other
other incentives
incentives under
under cluster
cluster programs.
programs. The
The country
country has
has
huge
huge growth
growth potential
potential toto create
create and
and enhance
enhance thethe capacity
capacity of of enterprises
enterprises both
both inin the
the manufacturing
manufacturing and
and service
service sector
sector byby using
using the
the available
available resources.
resources. There
There are
are huge
huge
opportunities
opportunities forfor the
the MSMEs
MSMEs to to grow
grow asas ancillary
ancillary industries
industries to to unleash
unleash greater
greater industrial
industrial growth.
growth. Development
Development of of the
the sector
sector isis therefore
therefore extremely
extremely important
important as
as itit
holds
holds the
the key
key to
to inclusive
inclusive growth
growth and
and plays
plays aa pivotal
pivotal role
role inin holistic
holistic development
development of of the
the country.
country.

India
India isis the
the fourth
fourth largest
largest economy
economy inin the
the world
world (in
(in terms
terms ofof PPP
PPP mode,
mode, and
and the
the second
second largest
largest inin developing
developing Asia)
Asia) which
which accounts
accounts for for 22%
22% of
of GDP,
GDP, 33.8%
33.8% population
population
MSME

and
and 32.5%
32.5% of of the
the potential
potential workforce
workforce inin developing
developing Asia.Asia. The
The incidence
incidence of
of growth
growth isis evident
evident from
from the
the increased
increased investment
investment inin infrastructure,
infrastructure, abundant
abundant job
job opportunities,
opportunities,
emergence
emergence of of aa robust
robust private
private sector
sector with
with small
small and
and big
big companies/corporate
companies/corporate houses
houses and and high
high rise
rise inin consumerism.
consumerism. The
The MSME MSME sector
sector has
has the
the potentialities
potentialities to
to
emerge
emerge as as thethe backbone
backbone of of Indian
Indian economy
economy and and to to continue
continue as
as anan engine
engine of of growth
growth provided
provided an an environment-friendly
environment-friendly policy
policy framework
framework andand enabling
enabling
infrastructural support are made available for its functional
infrastructural support are made available for its functional operations. operations.

MSMEs
MSMEs inin India
India consistently
consistently feed
feed the
the domestic
domestic and
and thethe international
international value
value chain
chain asas manufacturers,
manufacturers, suppliers,
suppliers, distributors,
distributors, retailers,
retailers, contractors
contractors and
and service
service
provider
provider by
by accounting
accounting for
for aa substantial
substantial segment
segment ofof our
our industrial
industrial units.
units. This
This sector
sector has
has been
been performing
performing appreciably
appreciably better
better than
than the
the overall
overall rate
rate of
of GDP
GDP (average
(average 8%8%
growth
growth per
per annum)
annum) andand the
the overall
overall industrial
industrial output
output (measured
(measured by by Index
Index of
of Industrial
Industrial Production-IIP).
Production-IIP). Availability
Availability of
of adequate
adequate financial
financial resources,
resources, aa supportive
supportive policy
policy
framework
framework to address the areas like entrepreneurial skill development, a competent pool of human resources, application of latest technology and new
to address the areas like entrepreneurial skill development, a competent pool of human resources, application of latest technology and new
innovations, adequate international market linkages and bilateral trade agreements etc. would make the Indian MSME sector
innovations, adequate international market linkages and bilateral trade agreements etc. would make the Indian MSME sector globally competitive to address globally competitive to address
the
the emerging
emerging challenges
challenges and
and help
help ensure
ensure their
their sustainability.
sustainability.

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 Growth Opportunities & Potentials
The
The roadmap
roadmap forfor MSME
MSME development
development should
should include
include aa target
target for
for increase
increase inin the
the share
share of
of their
their contribution
contribution from
from the
the present
present 8% 8% to
to 15%
15% by
by 2020,
2020, aa substantial
substantial increase
increase
inin generation
generation ofof employment
employment avenues
avenues upup to
to 50%,
50%, anan enhancement
enhancement inin MSMEMSME contribution
contribution inin the
the key
key public
public and
and private
private industry
industry sector
sector by
by meeting
meeting the
the growing
growing domestic
domestic
demand,
demand, indigenization and important substitution and growth in foreign exports15.The recent ‘Make in India’ initiative by Government of India would make aa
indigenization and important substitution and growth in foreign exports15.The recent ‘Make in India’ initiative by Government of India would make
substantial
substantial impact
impact inin the
the area
area of
of indigenization
indigenization andand would
would also
also attract
attract sizable
sizable foreign
foreign investment.
investment. Similarly,
Similarly, the
the ‘Digital
‘Digital India’
India’ programed
programed offers
offers huge
huge opportunities
opportunities
to
to MSMEs
MSMEs to to participate
participate inin big
big way
way inin the
the Information
Information and
and Communication
Communication Technology
Technology (ICT) (ICT) sector.
sector.
MSME

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 Remedial Measures proposed
Although
Although the
the performance
performance of of the
the MSME
MSME sector
sector has
has been
been commendable
commendable over over the
the years
years inin terms
terms of
of employment
employment generation,
generation, growth
growth of
of exports
exports andand inin
bringing
bringing about
about social
social transformation,
transformation, aa lot
lot more
more need
need to
to be
be done
done for
for their
their continued
continued growth
growth and
and sustained
sustained development.
development. The
The issues
issues and
and constraints
constraints that
that hinder
hinder
their growth need to be identified and properly addressed. There are a few remedial measures to improve performance of MSMEs are indicated
their growth need to be identified and properly addressed. There are a few remedial measures to improve performance of MSMEs are indicated below: below:

1.
1. Easy
Easy Access
Access to to Finance
Finance and
and Credit
Credit :: Institutional
Institutional finance/credit
finance/credit from
from banks
banks and
and other
other financing
financing institutions
institutions should
should bebe promptly
promptly available
available without
without long
long and
and
cumbersome
cumbersome procedures.
procedures. Sanction
Sanction of
of credit
credit // loan
loan applications
applications by
by public
public sector
sector banks
banks should
should be
be made
made within
within aa reasonable
reasonable time
time frame
frame at
at affordable
affordable and
and
reduced
reduced rate
rate of
of interest.
interest.

2.
2. Stepping
Stepping up up Infrastructural
Infrastructural andand Support
Support Facilities:
Facilities: Deficiencies
Deficiencies inin basic
basic infrastructural
infrastructural facilities
facilities like
like water,
water, power
power supply,
supply, road/rail
road/rail and
and telephone
telephone
MSME

connectivity,
connectivity, etc.
etc. should
should bebe addressed
addressed on on priority
priority basis.
basis. Use
Use ofof solar
solar or
or renewable
renewable energy
energy as
as an
an alternative
alternative source
source should
should be be encouraged
encouraged inin rural
rural areas
areas on
on
subsidized
subsidized basis.
basis. AAcluster-centric
cluster-centric or
or cluster
cluster development
development approach
approach should
should bebe adopted
adopted for
for aa number
number of
of enterprises
enterprises working
working inin closer
closer proximity.
proximity.

3.
3. Creation
Creation ofof adequate
adequate Marketing
Marketing Linkages
Linkages :: For
For enhancing
enhancing sale
sale of
of products,
products, regular
regular trade
trade fairs/exhibitions
fairs/exhibitions etc.
etc. should
should be
be conducted
conducted for
for creation
creation of
of aa larger
larger
platform
platform for better marketing facilities. The Govt. of India policy regarding 20% mandatory procurement of MSME products by government Departments/ State
for better marketing facilities. The Govt. of India policy regarding 20% mandatory procurement of MSME products by government Departments/ State
PSUs
PSUs should
should be
be ensured.
ensured.

4.
4. Skill
Skill Development
Development and
and Capacity
Capacity Building:
Building: Initiatives
Initiatives should
should bebe taken
taken for
for skill
skill // competency
competency development
development of of human
human resources.
resources. Infrastructural
Infrastructural and
and
professional
professional support from Rural Self Employment Training Institutes (RSETI) and suitable training institutes may be obtained for conducting training of
support from Rural Self Employment Training Institutes (RSETI) and suitable training institutes may be obtained for conducting training of
entrepreneurs and workers engaged in different activities. Awareness / sensitization programmes and TV/Radio talks should be
entrepreneurs and workers engaged in different activities. Awareness / sensitization programmes and TV/Radio talks should be conducted conducted

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 Remedial Measures proposed
5.
5. Access
Access toto Modern
Modern Tools
Tools and
and Technology:
Technology: MSMEs
MSMEs today
today need
need to
to adopt
adopt and
and adhere
adhere toto quality
quality parameters
parameters of
of international
international standards
standards inin the
the context
context of
of aa globalized
globalized
market.
market. Technological
Technological obsolescence
obsolescence should
should be
be replaced
replaced by
by adoption
adoption ofof modern
modern and
and latest
latest tools
tools and
and technology
technology for
for increased
increased productivity
productivity and
and quality
quality product
product for
for
competitive advantage.
competitive advantage.

6.
6. Policy
Policy Intervention
Intervention andand Support
Support Mechanisms:
Mechanisms: Industry-friendly
Industry-friendly policies
policies should
should be
be initiated
initiated by
by the
the government
government for for promoting
promoting infrastructural
infrastructural support
support facilities
facilities
and
and for
for easy
easy availability
availability of
of finance
finance by
by the
the scheduled
scheduled banks.
banks. Government
Government and and Banks
Banks should
should take
take steps
steps for
for revival
revival of
of sick
sick units
units as
as per
per RBI
RBI Guidelines
Guidelines and
and Credit
Credit
Guarantee
Guarantee Fund
Fund Trust
Trust for
for Micro
Micro and
and Small
Small
Enterprises (CGAMSE) Scheme.
Enterprises (CGAMSE) Scheme.
MSME

Sick
Sick enterprises
enterprises should
should bebe given
given one
one time
time settlement
settlement (OTS)
(OTS) facility
facility by
by the
the banks
banks before
before enforcing
enforcing measures
measures under
under the
the Securitization
Securitization and
and Reconstruction
Reconstruction of of Financial
Financial
Assets
Assets and
and Enforcement
Enforcement of of Security
Security Interest
Interest (SARFAESI)
(SARFAESI) Act.Act. Single
Single window
window system
system for
for approval
approval ofof MSME
MSME projects
projects may
may be
be streamlined
streamlined for
for clearance.
clearance. Creation
Creation of
of an
an
apex
apex National
National MSME
MSME Authority
Authority under
under the
the Ministry
Ministry of
of MSME,
MSME, universal
universal registration
registration and
and financial
financial inclusion
inclusion of
of MSMEs,
MSMEs, increase
increase the
the flow
flow of
of equity
equity to
to the
the MSME
MSME sector
sector and
and
steps to enhance effectiveness and utilization of credit guarantee/insurance schemes etc. are some of the recommendations of the Committee
steps to enhance effectiveness and utilization of credit guarantee/insurance schemes etc. are some of the recommendations of the Committee on financial architectureon financial architecture
of
of the
the MSME,
MSME, 2015.
2015.

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 Government Initiatives
The
The MSME
MSME sector,
sector, acknowledged
acknowledged as as the
the backbone
backbone of of the
the India
India economy,
economy, isis further
further expected
expected to
to contribute
contribute significantly
significantly to
to India's
India's growing
growing GDP.
GDP. TheThe sector
sector will
will inevitably
inevitably
support
support India
India to
to improve
improve nation's
nation's financial
financial inclusion
inclusion and
and mitigate
mitigate the
the urban
urban rural
rural divide.
divide. Also,
Also, itit isis expected
expected that
that by
by 2020,
2020, India
India will
will have
have the
the largest
largest job
job ready,
ready, youth
youth
population in the world and with favourable business ecosystem in the manufacturing sector it will not only generate employment of significant
population in the world and with favourable business ecosystem in the manufacturing sector it will not only generate employment of significant level but also becoome level but also becoome
hot
hot bed
bed of
of entrepreneurial
entrepreneurial activities.
activities.

Our
Our government
government realises
realises the
the urgency
urgency forfor providing
providing aa fast fast paced
paced growth
growth toto MSME
MSME sector
sector andand therefore,
therefore, 2017
2017 will
will further
further witness
witness strengthening
strengthening of of current
current policies
policies and
and
introduction
introduction ofof new
new initiatives
initiatives to
to improve
improve the
the business
business environment
environment for for MSMEs.
MSMEs. The The most
most awaited
awaited reform
reform inin 2017
2017 isis implementation
implementation of of GST
GST bill.
bill. Implementation
Implementation of of GST
GST
Bill is expected to benefit MSMEs not only with simpler tax structure but also with aspects such as improved technology adoption
Bill is expected to benefit MSMEs not only with simpler tax structure but also with aspects such as improved technology adoption in order to comply with GST system. in order to comply with GST system.
The
The 'One
'One Nation,
Nation, OneOne tax'
tax' approach
approach will will make
make India India anan open
open market
market helping
helping SMEs
SMEs explore
explore new
new markets
markets with
with no no or
or low
low entry
entry barriers
barriers and
and experience
experience business
business
MSME

expansion.
expansion. Therefore,
Therefore, the the upcoming
upcoming GST GST bill
bill isis expected
expected to to revolutionize
revolutionize the
the Indian
Indian taxtax system
system and
and offer
offer the
the SME
SME sector
sector an
an equal
equal footing
footing as
as compared
compared to to their
their bigger
bigger
more
more established
established counterparts.
counterparts. 2017 2017 isis going
going to to be
be aa year
year ofof progressive
progressive changes
changes inin the the Indian
Indian SME
SME sector
sector based
based on on the
the above-mentioned
above-mentioned trends. trends. Several
Several policy
policy
interventions
interventions along
along with
with technology
technology andand innovation
innovation will will continue
continue toto play
play aa pivotal
pivotal role
role inin creating
creating aa business-friendly
business-friendly atmosphere
atmosphere for for the
the SMEs.
SMEs.

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 Conclusion
MSMEs
MSMEs over over the the years
years havehave assumed
assumed greater
greater significance
significance inin ourour burgeoning
burgeoning national
national economy
economy by by contributing
contributing to to employment
employment generation
generation and
and rural
rural
industrialization.
industrialization. This
This sector
sector possesses
possesses enough
enough potential
potential and
and possibilities
possibilities to
to push-
push- button
button accelerated
accelerated industrial
industrial growth
growth inin our
our developing
developing economy
economy and and well
well poised
poised to
to
support national programme like ‘Make in India’. This sector has exhibited enough resilience to sustain itself on the strength of our traditional
support national programme like ‘Make in India’. This sector has exhibited enough resilience to sustain itself on the strength of our traditional skills and expertise skills and expertise
and
and by
by infusion
infusion ofof new
new technologies,
technologies, capital
capital and
and innovative
innovative marketing
marketing strategies.
strategies. Appropriate
Appropriate strategies
strategies should
should be
be evolved
evolved forfor creation
creation of
of an
an enabling
enabling ecosystem
ecosystem
where
where these
these enterprises
enterprises areare able
able to
to access
access the
the benefits
benefits meant
meant for
for themselves
themselves under
under aa formal
formal and
and friendly
friendly ecosystem
ecosystem and
and are
are further
further capable
capable ofof meeting
meeting the
the emerging
emerging
challenges
challenges of of aa globally
globally competitive
competitive order.
order.
MSME

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