The MSME Sector Needs Helping Hands from the Government

newspaper

The Economic Times

Transcript: Micro, small and medium enterprises (MSMEs) are critical to the nation’s economy. They contribute approximately 40% of India’s domestic produce, alsmost 50% of total exports and 45% of industrial employment. More importantly, they are the second largest manpower employer after agriculture. SMEs in India are mostly in the unorganized sector and are the source of livelihood for millions of people. Contribution of SMEs towards society is even more significant than simply economic returns. Interestingly, if one compares employment generation by MSME sector vis-a-vis big enterprises in the backdrop of investments, one will find that the MSME sector creates huge employment despite with much less of investments. The new government under chief minister Mamata Banerjee has made it clear that special emphasis will be given to set up small and medium sector in the state. The state finance minister Amit Mitra has also indicated that there is a need to reform the MSME sector in the state. These are welcome moves.

The MSME Sector, Which Generates Huge Employment, Needs A Helping Hand From The New Government for Greater Prosperity.

I feel that the new government should set up a separate cell that will deal with land issues for the mSME sector. Often getting land becomes a challenge for the MSME sector, which is not flush with funds. If the government helps the entrepreneur in acquirement land smoothly at a fair price, then it becomes easier for him to take the next step. Banking assistance for MSMEs is perhaps the most critical issue. Banks, even today, generally stay away from financing the MSME sector, particularly the micro and small sectors. Lack of access to finance and timely credit as well as escalating costs are primary reasons for under-utilization of the manufacturing capabilities of SMEs. I hope that the new government will take up this vital issue with concerned authorities for helping the MSME sector to get finance.