Government Regulation for MSME Reforms
To encourage more MSMEs to register, the Government of India has been a constant support system to boost the Small and Micro level business. The government has provided the MSMEs with many new resolutions and measures under the Micro, Small, and Medium Enterprises Development Act, 2006. They aim in enhancing and promoting the growth of the MSMEs by facilitating in various sectors such as financing, investments, and increasing their competitiveness by creating a reputed image in the public.
We will discuss all the great initiatives, undertaken by the Government to ensure a smooth and hassle-free process for the MSMEs effectively with cost-effective benefits and growth-oriented steps:
Creating a brand name and ren cognition.
The Government has been very intending from the beginning in uplifting domestic and small-scale entrepreneurs, to reach sustainable growth that helps them be recognized worldwide globally. The government aims in creating the MSMEs, a reputed name that creates goodwill and builds a good image in society providing them an opportunity to access and enjoy the benefits of easy and hurdle-free, credit funding. A good brand name helps MSMEs be widely known for their products and distinguish them from similar new products in the market. The government, by this, ensures to create of a healthy competitive circumstance for the MSMEs and enhances long-term survival in the market.
Creating Demand and Easy access to the Markets
The Government of India, through its vision for ‘Aatmanirbhar Bharath Abhiyan’, intends to create a self-reliant nation that will be based on five foundations laid down. They include infrastructure, economy, demography, tech-driven systems, and demand. The government firmly believes that the MSMEs with the right guidance and assistance from the five foundations have the ability to create a self-reliant India. The focus majorly relies on upon, creating demand for the MSMEs through public procurement by enabling the goods and services procured by the government and PSUs. To ensure a smooth procurement by the MSMEs the government e-Marketplace was created to enable a unified procurement system that provides a single platform for the procurement of goods, services, and works.
Schemes Launched by the Government
The Government has taken many initiatives in launching schemes that assist the MSMEs to be economically stable and provide routes to access resources and technology. Schemes like Udyog Aaadhar Memorandum, zero defect zero effect, Credit linked capital subsidy scheme, SME Division Schemes, Development Commissioner Schemes, NSIC Schemes, ARI Division Schemes, Ministry of Skill Development and Entrepreneurship, Ministry of Labour and Employment Schemes, Ministry of Heavy Industries and Public Enterprises Schemes, Ministry of Youth Affairs and Sports Schemes, Ministry of New and Renewable Energy Schemes, Ministry of Women and Child Schemes, Ministry of Urban Development Schemes, Ministry of Tribal Affairs, Ministry of Tourism Schemes, Ministry of Textiles Schemes and Ministry of Social Justice Schemes. To achieve incredible growth in self-reliant India the government of India has launched these schemes.
Although the MSMEs get a low chance of instantly receiving funds, the government plays a vital role in supporting them with small, medium-term to long-term finances. Timely financing and credit funding at a reasonable cost are essential for the adequate growth of MSMEs. The apex body which is responsible for MSME growth and development in India is SIDBI, that are typically involved in refinancing for the business sectors and growth. Additionally Commercial banks and Non-Banking Financial Companies, also lend to the MSMEs in acquiring funds that facilitate their investments for capital. In addition, to this, a crucial role is played by the small and medium accounting practices, in providing guidance to micro businesses and getting access to choosing the right amount of finance according to their requirement.
Infrastructure and Technology
The Government of India has taken an initiative that will facilitate the MSMEs with all the necessary infrastructure and technologies and boost the growth of their products and services as they lack enough access to infrastructure and technology compared to big MNC companies. The government has adopted the cluster development approach for increased competitiveness and to enhance its technological capabilities. The program also focuses on implementing new and alternative strategies to upgrade their skills and develop their existing technology by providing them with knowledge and guiding them throughout the completion of the process. The Ministry of Micro, Small, and Medium, Enterprises has provided the MSMEs with 15% capital subsidies with a maximum limit of 1 crore, for technological upgradation. Besides, the modernization of technologies the MSMEs will also need to adapt to digitalization to increase the efficiency of the business process and better customer service and build a resilient economy.
Skills and Women Entrepreneurship
The MSMEs always face a shortage of skilled laborers that hinders their growth. The Government of India conducts skill development training, that helps them to identify the skills they deprive of and can focus on upskilling and acquiring the knowledge to explore new market opportunities and trends by foreseeing future uncertainties and preparing for better handling of such unpredictable circumstances and volatiles in the market.
The Government also encourages women Entrepreneurs and nurtures them providing training and guiding them on exploring their product's uniqueness and what innovation, could be implemented. The Government of India has also granted up to 30% of the credit to lending institutions and banks to fund women entrepreneurs to boost the flow of credit.