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31 Jan Maharashtra tops the list with the maximum number of MSME owned by SCs

Posted at 31 Jan 2022 in Current Affairs by Vivek Raj 0 Comments

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(GS Paper-II, Polity,Constitution,Governance,Social Justice and International Relations)

Source: The Hindu

Why in news?

Recently data was published by the Developmental Commission in the Union Ministry of MSME.
According to the data Maharashtra topped the list with the maximum number of MSME owned by entrepreneurs from the scheduled caste community with 96,805 Enterprises.
Tamil Nadu with 42,997 Enterprises stood second and Rajasthan bagged the third position with 38517 units in the list.
Total 6% of the Micro Small & Medium Enterprise( MSME) is owned by the scheduled caste entrepreneurs.

What is MSME?

It is considered as the backbone for promoting development along with accelerating economic growth.
It constitutes a vital part of the Indian economy where the existence of 6.3 crore MSME not only contributes to one third of GDP of the country but is also a large-scale employer.
As per the AtmaNirbhar Bharat Abhiyan 2020 the MSME based on their turnover and investments were classified as –
Micro: with investment of less than ₹1 crore and turnover less than ₹5 crore
Small: with investment less than ₹10 crore and turnover less than ₹50 crore
Medium: with investment less than ₹20 crore and turnover less than ₹100 crore.

Registration of MSME: The Hindu Analysis

To avail the concessions and the benefit from the central and state government MSME shall register itself through Udayam system of registration which came into effect on 1 july 2020.
Uploading documents and proof will not be mandatory; one can simply fill registration based on self-declaration.
Investment in plant, machinery equipment and turnover from the basic criteria for MSME classification.
To facilitate the entrepreneurs in registration, the Champions Control Room has been made legally responsible across the country.

It generates the second largest number of employment in the country after agriculture and employs around 120 million persons.
It accelerates inclusive growth in the country by providing employment opportunities in the rural areas specifically to the people from weaker sections of the society.
Establishment of small industries and business in towns and rural areas help in promoting the habit of using banking services and thereby contributing towards financial inclusion.
The MSME sector in the country contributes around 29% of GDP through its national and international trade.
Around 45% of the export from the country is done by MSME.

Credit supply shortage has been the major obstacle faced by the MSME sector in India. The total demand for credit in the sector is ₹ 36 trillion and total availability stands around 16 trillion only.
The major reason behind such credit gap is the lack of formalization amongst MSME.
Another area of concern is the lack of Technology upgradation, the sector still based on the obsolete technology which ultimately negatively impacts its production efficiency.
Most of the MSME space comprises only small and local shops and scaling them up is a problem specially due to the lack of access to funds.

Way forward

Formulation and promotion of SME Bond will help provide lower interest rate for MSME than another financial intermediaries charges.
Labour laws shall be Reform to make it more conducive to promote the growth of MSME.
Curtailing unnecessary type work and improving regulations with focus on Ease of doing business is imperative to enhance the productivity of the MSME sector.