International MSMEs Day

• 29 Jun 2022

For Prelims: MSME, MSME Day and Significance, Efforts to Promote MSMEs

For Mains: Significance of MSME for Indian Economy

Why in News?

International MSME Day is observed every year on 27^th June all over the world to highlight the significance of MSMEs and how they play a crucial role in being the backbone of the country’s economy.

• Earlier, Ministry for Micro, Small and Medium Enterprises has launched the MSME (Micro, Small and Medium Enterprises) Sustainable (ZED-Zero Defect Zero Effect) Certification Scheme.

What are the Key Points?

• History:
  • The United Nations (UN) designated 27^th June as Micro, Small and Medium-sized Enterprises Day through a resolution passed in the UN General Assembly in April 2017.
  • In May 2017, a program titled 'Enhancing National Capacities for Unleashing Full Potentials of MSMEs in Achieving the Sustainable Development Goals (SDGs) in Developing Countries was launched.
  • It has been funded by the 2030 Agenda for Sustainable Development Sub-Fund of the United Nations Peace and Development Fund.
• Theme for 2022:
  • Resilience and Rebuilding: MSMEs for Sustainable Development.
    • The theme mainly highlights that for the socio-economic development of a country Micro-Small and Medium-Sized Enterprises is a necessary component.
• Objectives:
  • World MSME Day 2022 recognizes the potential of MSMEs and their role in strengthening the economies globally.
  • It also aims to raise public awareness regarding the contribution of MSMEs to global economic growth and sustainable development.
• Significance:
  • As per the United Nations, the formal and informal MSMEs account for 70 % of the total employment and 50 % of the Gross Domestic Product (GDP).
  • Moreover, MSMEs make up 90 % of all the firms. With such a significant contribution to the country’s economy, MSMEs are essential for the job creation, innovation and productivity growth.
  • However, despite being a key player in generating jobs, MSMEs worldwide face challenges in working conditions, productivity, and informality apart from the lack of support from the governments and administrations.
  • World MSME Day is celebrated to unlock the potential of such enterprises and also to utilize it for bolstering the global economy.

What is MSME?

• About:
  • Micro-Small and Medium-Sized Enterprises are the organizations that do not usually employ more than 250 employees, however, are responsible for creating more than two-thirds of all jobs globally.

• Role of MSME in Indian Economy:
  • They are the growth accelerators of the Indian economy, contributing about 30% of the country’s Gross Domestic Product (GDP).
  • In terms of exports, they are an integral part of the supply chain and contribute about 48% of the overall exports.
  • MSMEs also play an important role in employment generation, as they employ about 110 million people across the country.
    • Interestingly, MSMEs are intertwined with the rural economy as well, as more than half of the MSMEs operate in rural India.

What are the Related Initiatives?

• The Micro Small and Medium Enterprises Development (MSMED) Act: It was notified in 2006 to address policy issues affecting MSMEs as well as the coverage and investment ceiling of the sector.
• Prime Minister’s Employment Generation programme (PMEGP): It is a credit linked subsidy scheme, for setting up of new micro-enterprises and to generate employment opportunities in rural as well as urban areas of the country.
• Scheme of Fund for Regeneration of Traditional Industries (SFURTI): It aims to properly organize the artisans and the traditional industries into clusters and thus provide financial assistance to make them competitive in today's market scenario.
• A Scheme for Promoting Innovation, Rural Industry & Entrepreneurship (ASPIRE): The scheme promotes innovation & rural entrepreneurship through rural Livelihood Business Incubator (LBI), Technology Business Incubator (TBI) and Fund of Funds for start-up creation in the agro-based industry.
• Interest Subvention Scheme for Incremental Credit to MSMEs: It was introduced by the Reserve Bank of India wherein relief is provided upto 2% of interest to all the legal MSMEs on their outstanding fresh/incremental term loan/working capital during the period of its validity.
• Credit Guarantee Scheme for Micro and Small Enterprises: Launched to facilitate easy flow of credit, guarantee cover is provided for collateral free credit extended to MSMEs.
• CHAMPIONS portal: It aims to assist Indian MSMEs march into the big league as National and Global CHAMPIONS by solving their grievances and encouraging, supporting, helping and hand holding them.
• MSME Innovative Scheme: It ensures support through guidance, financial support, technical support, and more to MSMEs to scale up.
• Udyam Registrations Portal: This new portal assists the government in aggregating the data on the number of MSMEs in the country.
• MSME SAMBANDH: It is a Public Procurement Portal. It was launched to monitor the implementation of the Public Procurement from MSEs by Central Public Sector Enterprises.

Source: ET