The MSME sector in India plays a robust role and contributes to nearly 30% of the country’s GDP making it the second-largest employment provider in the country, second only after agriculture. When the COVID-19 pandemic hit us, it became imperative for quick and effective measuresto be introduced that would support the ‘growth engine of the nation’ and help in its survival.
One year since the government of India introduced various initiatives under Atmanirbhar Bharat, let’s analyse the impact that these schemes have had.
1. Widening the horizon and extending the benefit umbrella
A long-awaited demand, the new definition for MSME classification came as a beacon of hope as it has brought more enterprises under the purview of being classified as MSMEs and enabled them to accrue the benefits available. In addition to this, the high threshold limit will also encourage MSMEs to scale-up and at the same time, continue availing these benefits. As a step in the right direction towards digitisation, it has also become easier to register as an MSME with the new paperless portal.
2. Faster revival of businesses
The revival of businesses in a faster and effective manner was key in uplifting the sector to navigate the pandemic. When the MSMEs in despair needed funding for support, the INR 3 lakh crores Emergency Credit Line came as a hope to help the beneficiaries meet their operational liabilities and resume businesses by clearing payments to suppliers, buying raw material, clearing salaries to employees, etc. This has also helped in safeguarding jobs across the country. It was the need of the hour and came as a quick relief for the MSMEs in India.
3. Path towards self-reliance with more opportunities for local businesses
As India strives towards becoming self-reliant, the new measures have provided opportunities for MSMEs to procure more government tenders. The disallowance of global tenders in projects worth up to INR 200 crore has also helped removed unfair competition from foreign companies. This move is a stimulus for local businesses, further supporting the Make in India initiative.
To conclude, all these measures such as collateral-free loans, subordinate debt for stressed enterprises, equity infusion through a fund of funds, etc supported MSMEs to an extent in their revival and helped them in times of despair. However, as we are now witnessing the second wave of COVID-19 which has hit us harder than ever, a lot will depend on the continued seriousness of implementation and monitoring by all the respective agencies.
BY ROHIT MOHAN PUGALIA, FOUNDER AND MANAGING DIRECTOR, SOCH GROUP, CO-FOUNDER AND CEO, MUNCHILICIOUS GRANOLA
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