MSME

Micro, Small and Medium Enterprises (MSME) sector has come out as a highly populated sector of the Indian economy. MSMEs not only play important role in providing large employment opportunities at comparatively lower capital cost than large industries but also help in industrialization of rural & backward areas, thereby, reducing regional imbalances, assuring more equitable distribution of national income, employment and wealth. MSME is known as Micro, Small, and Medium Enterprises. Following the 2006 Micro, Small, and Medium Enterprises Development (MSMED) Act, the enterprises are classified into two segments.

1.Manufacturing Enterprises – Enterprises that are engaged in the production or manufacturing of goods in any industry

2.Service Enterprises – Enterprises that are engaged in providing or rendering services

On 13th May 2020, the Union Cabinet of India lead by Finance Minister Nirmala Sitharaman had approved the modification in MSMEs’ classification criteria from “investment in plant and machinery” to “annual turnover.” She also added the additional principle of turnover along with the investment.

Udyam Registration (formerly Known as Udyog Aadhar)

Udyog Aadhar is a government registration provided with a recognition certificate known as Udyog Aadhar Certificate for MSME and With effect from 1st July 2020, the process of registration of Udyog Aadhar is known as Udyam Registration. The idea behind introducing Udyam Registration was to simplify the procedural format that business owners had to go through to register their business under Micro Small Medium Enterprise or MSME.

Schemes for the MSME

Prime Minister Employment Generation Programme (PMEGP)               

The Loan under PMEGP provided by the various Financial Institutions and Banks maximum cost of the project admissible Rs 25 Lakh for manufacturing and Rs 10 Lakh for Business/service. The assistance under PMEGP Scheme (of project cost) Area (location of project/unit) General category 15% (urban), 25% (Rural), Special 25% (urban) 35% (Rural) (including SC/ ST/ OBC/ Minorities/Women, Ex-servicemen, Physically handicapped, NER, Hill and Border areas, etc.) The balance amount of the total project cost will be provided by the banks in the form of term and working capital. To Know more click below:  https://msme.gov.in/node/1763

Credit Guarantee Trust Fund for Micro & Small Enterprises (CGTMSE)

Ministry of MSME and Small industrial Development Bank of India (SIDBI) has jointly established the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) to implement Credit Guarantee Scheme for MSEs. The corpus of CGTMSE is contributed by Government of India and SIDBI. 75% of the loan amount to the bank is guaranteed by the Trust Fund. Collateral free loan up to a limit of 1 crore Is available for individual Micro Small enterprise. To Know more click link:  https://msme.gov.in/node/1763

Credit Linked Capital Subsidy for Technology Upgradation (CLCSS)

To facilitate technology to MSEs through institutional finance for induction of well established and proven technologies in the specific and approved 51 sub-sector/products. Both upgradation projects (with or without expansion) and new projects eligible for 15% subsidy for additional investment up to ₹ 1 cr for technology upgradation by MSEs. Technology upgradation would ordinarily mean induction of state-of-the-art or near state-of-the- art technology. In the varying mosaic of technology covering more than 7,500 products in the Indian small scale sector. List of technologies is available at http://www.dcmsme.gov.in

Marketing Support/Assistance to MSMEs (Bar Code)

Under this scheme the reimbursement of registration fee (one time and recurring for 3 years) for bars coding. Financial assistance for reimbursement of 75% of one-time registration fee (Under MSE-MDA) and 75% of annual recurring fee for first three years (Under NMCP) paid by MSEs to GS1 India for the use of bar coding. The scheme applies only to MSEs with and registration with GS1 India for use of barcode. The application form along with formats for supporting documents may be collected from the Director, MSME-DI, or download from http://www.dcmsme.gov.in/

Lean Manufacturing Competitiveness for MSMEs

The objective of the scheme is to enhance the manufacturing competitiveness of MSMEs through the application of various Lean Manufacturing (LM) techniques. Financial assistance is provided for implementation of lean manufacturing techniques, primarily the cost of lean manufacturing consultant (LMC) (80% by Govt. of India and 20% by beneficiaries). Lean manufacturing consultants (LMCs) will raise bills for services provided to Special Purpose Vehicle (SPV). SPV will, in turn, pay the first installment of 20% to the LMC and will obtain reimbursement from the NMIU. Thereafter, Ministry of MSME will transfer funds to the NMIU. SPV payments to LMC will be on a milestone basis in 5 tranches, each of 20% of the amount fixed.

There are others scheme for the MSMEs to know more about others scheme click on the link: https://msme.gov.in/all-schemes/

Conclusion

The aim of this article was to make an overview of Scheme provided to MSMEs for support and stand itself in the global market despite the numerous challenges in the various forms. It was found that there are a number of challenges prevalent in the Indian Economy such as high cost of credit, difficulty of availability of raw materials at a competitive price, inadequate infrastructural facilities, and low skilled manpower. It generally seen, that technological development helps to differentiate a product from its competitors. The Govt. of India has taken several measures from time to time for technological development and financial support to MSMEs so that it can improve its competitiveness in the international market. To counter the other challenges too, new schemes and programs such as Make-In India, Skill India and Digital India have been launched over the years.