- Mention the challenges.
- Mention the measures taken.
MSMEs account for over 99% of the business in India. They have significant value contributions to job creation along with sustainable development. MSMEs are the largest employer in India outside Agriculture sector – it employs 11.1 crore people or 45% of all the workers.
- Pandemic induced disruptions have severely impacted MSMEs by depriving them of resources.
- Also they are facing global shocks from war & rising fuel prices.
- Most MSMEs fail to meet the global standards on productivity, environmental sustainability, health & workers’ safety.
- High degree of informality with many enterprises unregistered.
- So, informal enterprises cannot access formal MSME support and financing. Also, they cannot integrate fully in the global value chain which require full compliance with all regulations.
- Digitalization concerns the integration of digital technologies such as big data, AI, etc., into the business processes.
- Aatmanirbhar Bharat has been launched with the aim of developing the MSMEs towards this end.
- The Production Linked Incentive Scheme and the Zero Defect Zero Effect certification are helping to promote the MSME sector.
- Initiatives like Digital Saksham and interlinking of Udyam, e-Shram, NCS, and Aatmanirbhar Skilled Employee-Employer Mapping portals aim to promote digitalization in MSMEs.
- BEE and UNIDAO providing energy efficiency advisory services to various MSMEs across sectors.
- ILO together with FICCI and corporates are supporting MSMEs in creating & retaining jobs.
- The Start and Improve your Business programme is helping over a lakh young people to launch enterprises.
To leverage the demographic dividend, India needs to create many jobs. The policy focus should be on creating an environment to fully unlock the emerging opportunities in a rapidly changing global value chain ecosystem and maximize demographic dividend. MSMEs should commit to formalize their business, investing in improved productivity, compliance and above all decent work for India’s aspiring youth.