31 Jan Maharashtra tops the list with the maximum number of MSME owned by SCs
Maharashtra tops the list with the maximum number of MSME owned by SCs- Today Current Affairs
(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.
Significance of MSME: The Hindu Analysis
- 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.
Challenges before MSME: The Hindu Analysis
- 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.
- 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.
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