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International MSMEs Day

  • 29 Jun 2022
  • 6 min read

For Prelims: MSME, MSME Day and Significance, Efforts to Promote MSMEs

For Mains: Significance of MSME for Indian Economy

Why in News?

International MSME Day is observed every year on 27th June all over the world to highlight the significance of MSMEs and how they play a crucial role in being the backbone of the country’s economy.

What are the Key Points?

  • History:
    • The United Nations (UN) designated 27th June as Micro, Small and Medium-sized Enterprises Day through a resolution passed in the UN General Assembly in April 2017.
    • In May 2017, a program titled 'Enhancing National Capacities for Unleashing Full Potentials of MSMEs in Achieving the Sustainable Development Goals (SDGs) in Developing Countries was launched.
    • It has been funded by the 2030 Agenda for Sustainable Development Sub-Fund of the United Nations Peace and Development Fund.
  • Theme for 2022:
    • Resilience and Rebuilding: MSMEs for Sustainable Development.
      • The theme mainly highlights that for the socio-economic development of a country Micro-Small and Medium-Sized Enterprises is a necessary component.
  • Objectives:
    • World MSME Day 2022 recognizes the potential of MSMEs and their role in strengthening the economies globally.
    • It also aims to raise public awareness regarding the contribution of MSMEs to global economic growth and sustainable development.
  • Significance:
    • As per the United Nations, the formal and informal MSMEs account for 70 % of the total employment and 50 % of the Gross Domestic Product (GDP).
    • Moreover, MSMEs make up 90 % of all the firms. With such a significant contribution to the country’s economy, MSMEs are essential for the job creation, innovation and productivity growth.
    • However, despite being a key player in generating jobs, MSMEs worldwide face challenges in working conditions, productivity, and informality apart from the lack of support from the governments and administrations.
    • World MSME Day is celebrated to unlock the potential of such enterprises and also to utilize it for bolstering the global economy.

What is MSME?

  • About:
    • Micro-Small and Medium-Sized Enterprises are the organizations that do not usually employ more than 250 employees, however, are responsible for creating more than two-thirds of all jobs globally.

  • Role of MSME in Indian Economy:
    • They are the growth accelerators of the Indian economy, contributing about 30% of the country’s Gross Domestic Product (GDP).
    • In terms of exports, they are an integral part of the supply chain and contribute about 48% of the overall exports.
    • MSMEs also play an important role in employment generation, as they employ about 110 million people across the country.
      • Interestingly, MSMEs are intertwined with the rural economy as well, as more than half of the MSMEs operate in rural India.

What are the Related Initiatives?

  • The Micro Small and Medium Enterprises Development (MSMED) Act: It was notified in 2006 to address policy issues affecting MSMEs as well as the coverage and investment ceiling of the sector.
  • Prime Minister’s Employment Generation programme (PMEGP): It is a credit linked subsidy scheme, for setting up of new micro-enterprises and to generate employment opportunities in rural as well as urban areas of the country.
  • Scheme of Fund for Regeneration of Traditional Industries (SFURTI): It aims to properly organize the artisans and the traditional industries into clusters and thus provide financial assistance to make them competitive in today's market scenario.
  • A Scheme for Promoting Innovation, Rural Industry & Entrepreneurship (ASPIRE): The scheme promotes innovation & rural entrepreneurship through rural Livelihood Business Incubator (LBI), Technology Business Incubator (TBI) and Fund of Funds for start-up creation in the agro-based industry.
  • Interest Subvention Scheme for Incremental Credit to MSMEs: It was introduced by the Reserve Bank of India wherein relief is provided upto 2% of interest to all the legal MSMEs on their outstanding fresh/incremental term loan/working capital during the period of its validity.
  • Credit Guarantee Scheme for Micro and Small Enterprises: Launched to facilitate easy flow of credit, guarantee cover is provided for collateral free credit extended to MSMEs.
  • CHAMPIONS portal: It aims to assist Indian MSMEs march into the big league as National and Global CHAMPIONS by solving their grievances and encouraging, supporting, helping and hand holding them.
  • MSME Innovative Scheme: It ensures support through guidance, financial support, technical support, and more to MSMEs to scale up.
  • Udyam Registrations Portal: This new portal assists the government in aggregating the data on the number of MSMEs in the country.
  • MSME SAMBANDH: It is a Public Procurement Portal. It was launched to monitor the implementation of the Public Procurement from MSEs by Central Public Sector Enterprises.

Source: ET

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