The year 2018 was a year full of surprises for the Micro, Small and Medium Enterprises (MSME) sector as the sector received big thrust throughout the year be it is related to access to market or ease of doing business or loans in 59 minutes.
Keeping the importance of MSME sector in mind and the growing role and contribution of MSME sector in boosting employment and economic growth, the Finance Minister presented the Union Budget during the start of the year i.e. on February 1, 2018 and enhanced the budgetary allocation from Rs. 6481.96 crore in 2017-18 to Rs.6552.61 crore in 2018-19.
The Cabinet Committee on Economic Affairs on February 28, 2018 approved the Prime Minister’s Employment Generation Programme (PMEGP-credit-linked subsidy programme) beyond 12th Plan for three years from 2017-18 to 2019-20 with a total outlay of Rs.5,500 crore.
The Scheme is aimed at generating self-employment opportunities through establishment of micro-enterprises in the non-farm sector by helping traditional artisans and unemployed youth in rural as well as urban areas.
On the occasion of International Women’s Day on March 8th 2018, the Ministry of MSME launched the portal for women entrepreneurs of India: www.udyamsakhi.org.
The portal is a network for nurturing entrepreneurship and creating business models for low cost products and services in order to empower women and make them self-reliant and self-sufficient.
It provides assistance through its platform for entrepreneurship learning tools, incubation facility, training programs for fund raising, providing mentors, one-on-one investor meet, provide market survey facility and technical assistance.
With regard to building international connections, the Ministry of MSMEs, organized the first ever International SME Convention in New Delhi from 22nd to 24thApril 2018.
During the convention, 23 agreements were signed between SMEs of India and SMEs of UK, Russia, Uzbekistan, Poland, Bhutan, Austria, Czech Republic, Cameroon and Sri Lanka. These agreements are in 12 sectors of food processing, agriculture, textiles, defence, ammunition, waste management, dairy products, coal, jewellery, health care and Education.
To mark the UN SME Day on 27th June, 2018, the Ministry of MSME organized the Convention- Udyam Sangam for the MSME sector in the country, which was inaugurated by President of India, Ram Nath Kovind, in New Delhi.
On the occasion, President Ram Nath Kovind launched the Solar Charkha Mission which cover 50 clusters across the country with a budget of Rs.550 crore for the year 2018-19 and 2019-20. The aim of the scheme is to generate direct employment to nearly one lakh persons in rural areas.
The scheme of Solar Charkha Mission was proposed in the Union Budget 2018-19 to harness non-conventional solar energy to further employment generation.
On the same day, a portal of the Ministry of MSME called “Sampark” was also unveiled by the President of India. The portal acts as a bridge between the talent pool and those enterprises seeking trained man power.
To create a platform for MSMEs of India and Korea, MSME Minister, Giriraj Singh and Minister of SMEs and Start-ups of Republic of Korea, Hong Jong-hak inaugurated India-Korea Technology Exchange Centre on 10th July, 2018 in New Delhi.
The purpose of the technology centre is to work towards building reliable alliances in space, solar energy, nano technologies and other developing technologies.
On July 23, the MSME Development (Amendment) Bill, 2018 was introduced in Lok Sabha by the MSME Minister of State Giriraj Singh. The Bill amends the MSME Development Act, 2006. The Act classifies micro, small and medium enterprises (MSMEs) on the basis of investment in plant and machinery, for enterprises engaged in the manufacturing or production of goods, and equipment, for enterprises providing services.
However, the bill was opposed by majority of the stakeholders as they believe that the proposed definition will likely crowd out a large number of small units from the benefits.
On September 19, MSME Ministry launched a monthly e-newsletter called ‘MSME Insider’, which gives information about the activities undertaken by the Ministry and also connects the Ministry with the millions of MSME units spread out across the country.
Besides, to promote cooperation between the Small & Medium Enterprises (SMEs) of India and Russia, a MoU was signed between National Small Industries Corporation Ltd. (NSIC) and JSC-Russian Small & Medium Business Corporation (RSMB Corporation) in the month of October.
And last but not the least, on November 2, 2018, Prime Minister Narendra Modi launched a support and outreach programme for MSME sector. The Prime Minister unveiled 12 key initiatives which will help in the growth, expansion and facilitation of MSMEs across the country:
— Loans upto 1 crore within 59 minutes through an online portal.
— Interest subvention of 2% for all GST registered MSMEs on fresh or incremental loans.
— All companies with a turnover of more than 500 crores to be mandatorily on TReDS platform to enable entrepreneurs to access credit from banks, based on their upcoming receivables, thus, solving the problems of cash cycle.
— All PSUs to compulsorily procure 25 percent from MSMEs instead of 20 percent of their total purchases.
— Out of the 25 percent procurement mandated from MSMEs, 3 percent reserved for women entrepreneurs.
— All CPSUs to compulsorily procure through GeM portal.
— 100 Technology Centres to be established at the cost of Rs 6000 crore.
— Govt. of India to bear 70 percent of the cost for establishing Pharma clusters. — Returns under 8 labour laws and 10 Union regulations to be filed once in a year.
— Establishments to be visited by an Inspector will be decided through a computerised random allotment.
— Single consent under air and water pollution laws. Returns will be accepted through self-certification and only 10 percent MSME units to be inspected.
— For minor violations under the Companies Act, entrepreneurs no longer have to approach court but can correct them through simple procedures. While launching the program, Modi emphasized on 5 key aspects for facilitating the MSME sector, that includes access to credit, access to market, technology up-gradation, ease of doing business and sense of security for employees. With the rising involvement of MSME retailers in e-commerce, the Department of Industrial Policy and Promotion (DIPP) on 26 December amended the Foreign Direct Investment (FDI) policy in e-commerce to create a level-playing field between offline and online retailers. Moving forward in 2019, the Reserve Bank of India (RBI) has decided to constitute an expert committee to identify causes and propose long term solutions for the economic and financial sustainability of the MSME sector.
The composition of the committee and its terms of reference will be finalized soon and the report will be submitted by the end of June 2019.