MSME sector poised for mega transformation in 2020
What is MSME ?
MSME or Micro, Small and Medium Enterprises is a group of businesses defined by the government of India under the act of (MSMED), 2006. They were classified in two categories:
1. Enterprises engaged in the manufacture or production, processing or preservation of goods with as investment below Rs.25lakh are Micro Enterprises, investment of Rs 25 lakh to 5 Crore are small enterprises and an investment of Rs 5 crore to Rs 10 crore is referred as Medium enterprise.
2. Whereas, Enterprises engaged in providing or rendering of services and whose investment in equipment is not directly related to the services rendered or as may be notified under the MSMED Act, 2006 with an investment not exceeding 10 Lakh is a micro enterprise, an investment between 10 lakh to 2 crore is a small enterprise and an investment 2crore to 5crore is a Medium enterprise.
The MSME sector, is considered a stockade of our economy as it accounts for 29% of GDP and 48% of exports. This sector is in an urgent need of reform and policy interventions towards ensuring timely availability of low cost credit, improving ease of doing business and technology upgradation to take on the challenge of creating millions of jobs.
MSME sector is poised for mega transformation in 2020 with a launch of online market place for indigenous and handmade Indian products appealing to the masses and digital data-based credit ratings to help entrepreneurs avail loans. The Centre government has plans to launch a ‘Bharat Craft’ e-commerce portal dedicated to the MSME sector to replicate the success story of Alibaba in China and Amazon in the US, with an aim to achieve a turnover of at least Rs 10 lakh crore from it in the next two years. Low cost funds for MSME sector are arranged by approaching private banks like ADB, World bank and KfW. A ‘digital data-based credit ratings’ for MSMEs is launched to help entrepreneurs receive bank loans based on these ratings.
The Khadi and Village Industries Commission (KVIC), under the MSME ministry, also proposes to form centres all over the country to facilitate khadi institutions to develop designs as per the market requirements, and uplift the local handicraft and product development.
The government is making policies to increase MSME exports and bring down imports by encouraging local production. To upscale the technology, a Rs 200 crore scheme has been sanctioned for setting up 12 technology centres, which is expected to be completed in the next two years. They intend a contribution of USD 2 trillion from MSMEs as India is looking forward to become a USD 5 trillion economy by 2024. The union MSME ministry lead by Nitin Gadkari has set a benchmark to generate 5 crore additional jobs from this sector in next 5 years.
Conclusion
It is quite evident that government is planning all sorts of possibilities and policies to uplift the MSME sector as it plays a vital role in job development and GDP of our country. Register your enterprise with MSME ministry and take the advantage of all the aids provided by the government. We at Legalway LLP strive to provide you with the best legal services and consultation for your business.
