Narayan Tatu Rane was given responsibility of the Ministry of Micro, Small and Medium Enterprises (MSME) in a major Cabinet reshuffle on Wednesday. Rane is a Rajya Sabha Member of Parliament for Maharashtra, currently serving his first term. Rane has previously served in the Maharashtra government as Chief Minister and Cabinet Minister for Industry, Revenue, Port, Employment, and Animal Husbandry, among other positions.
Prior to Rane, Nitin Gadkari was heading the MSME Ministry, which he held from 2019. Rane takes over the MSME Ministry at a difficult time for the industry, which has been struck hard by the Covid epidemic. In recent financial support announcements, the government has placed a specific emphasis on the sector, including a specialised resolution mechanism for MSMEs.
To mitigate the impact of the pandemic, the government introduced the much-discussed loan guarantee scheme for MSMEs and other eligible borrowers, and is currently working on one of the most challenging tasks in the MSME sector of creating five million job opportunities for youth and women.
The MSME portfolio is linked to the most essential issue, the country’s rate of growth and potential for employment. And it is the Prime Minister’s expectation that employment in this area, which is currently quite low, will improve, as well as new jobs will be created.
Gadkari during his three year tenure truly galvanised the MSME industry as he launched a series of steps for MSMEs. Following the COVID-19 epidemic, he advocated for the formation of an ‘Aatmanirbhar Bharat’ by fighting for MSME dues to be cleared, import substitute policies, increased GDP contribution from MSMEs, Ecommerce platform for MSMEs, No bar on corporates entering the MSME sector.
Gadkari last week had reinstated the classification of retailers and wholesale merchants as MSMEs, after a long-standing demand from retail and trade industry organisations. Retail and wholesale trades will now be eligible to register on the Udyam Registration Portal thanks to the new requirements. The Ministry of MSMEs published an Office Memorandum on July 2, 2021, stating that the ‘benefit of registration will be restricted to Priority Sector Lending.’
MSME organisations have raised concern about the broadening of the MSME definition, fearing that the sector and the incentives offered to manufacturing enterprises may be diluted. While traders and retailers have applauded the decision, numerous established MSME organisations have expressed reservations about the MSME definition’s expansion.
The Micro, Small, and Medium Enterprises (MSMEs) sector contributes significantly to the country’s socioeconomic development. The sector has grown in prominence in India as a result of its contribution to the country’s Gross Domestic Product (GDP) and exports. The sector has also made significant contributions to the development of entrepreneurship in India, particularly in semi-urban and rural areas.
It will be interesting to watch how the new Union Minister helps the ailing sector and help the SMEs and MSMEs to pick up the pieces and grow from here.