MSME stands for Micro Small and Medium Enterprises. In developing countries, the MSME sector is called the growth engine of the nation. Strengthening MSMEs would have multifold effects of boosting the economy and generating employment as well as reducing issues relating to migration of skilled, and unskilled workers and professionals to metro cities.

MSMEs contribute to the industrialization of rural and backward areas, reducing regional imbalances through the best utilization of their resources, ensuring equitable distribution of national income and wealth, and being a major partner in the process of inclusive growth.

Importance of MSME

The MSME sector is an extremely important section of India’s legacy economic model. This sector is considered job-centric and generating and has a crucial role to play in providing large-scale employment and industrialization of rural and backward areas.

• It creates Large-Scale Employment

MSMEs require low capital to set up a new business resulting in creating a vast opportunity for the unemployed population to avail. There is no economy like India so far that could provide this large number of qualified and skilled resources. MSME is a boon to youth talent in India to utilize its capacity to the fullest.

• Economic Stability in terms of Growth and Leverage Exports

MSMEs in India contribute to the tune of 30% of GDP. Owing to the contribution of MSME to manufacturing, exports, and employment, all the other related sectors are also getting benefitted from it. Nowadays, the practice of buying semi-finished, and auxiliary products from MSMEs has become more common, for example, buying of clutches by automobile companies to be used in vehicles. It is helping to create a linkage between MSME and big companies which is resulting in multifold benefits.

• Encourages Inclusive Growth

The inclusive growth of MSMEs has at the top priority of the Ministry for MSME for several years now. On the other hand, the poverty population and lack of proper infrastructure are deterrents to the growth and development of India.

• Cheap Labor and Minimum Overhead

While in large-scale organizations, one of the main challenges is to retain human resources. In the case of MSME, the requirement of labor is lesser, and on practical grounds, it does not need a very highly skilled laborer.

• Simple Management Structure for Enterprises

MSME can start its business with limited capital and resources which is within the control of the owner. This makes decision-making easy, quick, and efficient giving the best results. On the contrary, a large corporation requires departmentalization and a specialist for every departmental functioning as it has a complex organizational structure. Small enterprises may not need to hire an external specialist for its management and even if they need it is available at a very minimal cost in today’s time. Organizations like us are working in the same line to support and uplift MSMEs.

Benefits available under the MSMED Act 2006

• Protection against delayed payments by buyers of goods/services (Section 15 of the MSMED Act) and right to interest for delayed payments (Section 16 of the MSMED Act)
• Time-bound settlement of payment-related disputes with buyers of goods or services through conciliation and arbitration (Sections 18 to 21 of the MSMED Act)
• Central Government measures for promotion and development (section 9 of the MSMED Act)
• RBIs credit policies for ensuring timely and smooth flow of credit (section 9 of the MSMED Act)
• Preference policies (preference to micro-enterprises in respect of goods and services procured by Government Departments/aided institutions/ PSEs) notified by Central/State Government (Section 11 of the MSMED Act)

Challenges faced by MSMEs

• Absence of adequate and timely banking finance
• Non-availability of suitable technology
• Limited capital and knowledge
• Access to Technology
• Low production capacity
• Wasteful usage of resources/manpower
• Ineffective marketing strategy
• Nonavailability of skilled labour at affordable cost
• Follow up with various government agencies to resolve problems due to lack of manpower and knowledge etc.

Since MSME plays an important role in growing India’s economy every second business registered in India is MSME. So we are trying the best possible things to help MSMEs grow and become bigger. Let’s contribute to India’s growing economy and be a part of growing MSMEs by supporting them in various ways.

Do reach us for any kind of assistance at info@mycaindia.com