- May 11, 2023
Rebuilding the MSME Ecosystem
Anita Ananthan writes on how MSMEs are struggling in the current socio-political climate while big corporations are thriving.
The current economic and political environment have left everyone cautious. While big corporates are able to sail through, it is the Micro, Small and Medium Enterprises (MSME) – the highest employment generator and the backbone of the economy – which is struggling in the B2C segment. These enterprises are grappling for assistance and protection from big companies as they lack robust resources and technology. These are mostly enterprises in manufacturing and services with an investment and turnover lower than Rs 50 crore and Rs 250 crore, respectively.
The initiative of the Government of India, in the last five years, has played a major role in the protection, sustainability and growth of MSMEs. The government has introduced schemes, rebates and counselling to these enterprises from time to time.
MSME applicants need to be in business for two to three years and should have filed income tax returns at least for a year. The credit score ought to be 750 or more. Registrations can be made online or offline.
- MICRO: Investment less than Rs 1 crore; turnover less than Rs 5 crore
- SMALL: Investment less than Rs 10 crore; turnover less than Rs 50 crore
- MEDIUM: Investment less than Rs 50 crore; turnover less than Rs 250 crore
Bank loans are collateral free
Subsidy on patent registration
Overdraft interest rate exemption
Industrial promotion subsidy eligibility
Protection against delayed payments
Fewer electricity bills
ISO charges certification reimbursement
Guaranteed Emergency Credit Line (GECL) facility to MSME borrowers, including interested MUDRA borrowers
Special consideration in international trade fairs
Apart from the above subsidies, there are a few salient features to build quality products. MSMEs can benefit from innovation and digitalisation tools available at affordable funding.
However, the ground reality is most MSMEs are ignorant of the schemes and fail to take the advantages. In many cases digitalisation poses a concern for regular retailers who are unable to access to these systems. There is a crying need to educate these retail enterprises to rebuild a robust ecosystem and help the Covid-hit enterprises regain their growth path.
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