The Lok Sabha was briefed with a comprehensive information update on the matters related to MSMEs by Union Minister for Micro, Small and Medium Enterprises, Shri Narayan Rane as a written reply. In his note, Shri Rane emphasized on that as per Udyog Aadhaar Portal (since inception October 2015 to June 2020), the number of Micro, Small and Medium Enterprises (MSMEs) registered in All India was 102,32,468.
On 1st July 2020, after the adoption of a new definition of MSMEs, a new registration portal ‘Udyam Registration’ has been launched by M/o MSME and so far 41,37,443 classified MSMEs are registered on the portal in All India (from 01.07.2020 to 31.07.2021).
As MSMEs are present in both formal and informal sectors, data regarding temporary or permanent closure/suffered of the units is not maintained by the Government of India in the Ministry of Micro, Small and Medium Enterprises (MSME).
Studies have been conducted by National Small Industries Corporation (NSIC) and Khadi and Village Industries Commission (KVIC) to assess the impact of COVID-19 Pandemic on MSMEs including units set up under the Prime Minister’s Employment Generation Programme (PMEGP).
A. The main findings of the online study conducted by NSIC to understand the operational capabilities and difficulties faced by the beneficiaries of NSIC schemes amid Covid-19 pandemic are as follows: –
- 91% MSMEs were found to be functional.
- The five most critical problems faced by MSMEs were identified as Liquidity (55% units), Fresh Orders (17% units), Labour (9% units), Logistics (12% units) and availability of Raw Material (8% units.).
B. The findings of the study conducted by KVIC are as under:-
i. 88% of the beneficiaries of PMEGP scheme reported that they were negatively affected due to Covid-19 while the remaining 12% stated that they were benefitted during Covid-19 Pandemic.
ii. Among the 88% who were affected, 57% stated that their units were shut down for some time during this period, while 30% reported drop in production and revenue.
iii. Among the 12% who had benefitted, 65% stated that their business increased as they had units in retail and health sector and around 25% stated that their units benefitted as they were dealing with essential commodities or services.
iv. On the question of regular payment of salaries to the employees, around 46.60% respondents stated that they had paid the salaries in full, 42.54% reported to have partially paid and 10.86% reported to have not paid salary for some time during this period.
v. Majority of the beneficiaries expressed the need for additional financial support, relaxation of waiver of interest and marketing support for their products.
(b): The Ministry of Micro, Small and Medium Enterprises (MSMEs) implement various other schemes for the growth and development of MSME sector in the country. These include Prime Minister Employment Generation Programme (PMEGP), Micro and Small Enterprises-Cluster Development Programme (MSE-CDP), Scheme of Fund for Regeneration of Traditional Industries (SFURTI), Credit Linked Capital Subsidy and Technology Upgradation Scheme (CLCS-TUS) and SC/ST Hub.
Post Covid-19, Government has taken a number of initiatives under Aatma Nirbhar Bharat Abhiyan to support the MSME Sector in the country especially in Covid-19 Pandemic. Some of them are:
i) Rs 20,000 crore Subordinate Debt for MSMEs.
ii) Rs 3 lakh crores Collateral free Automatic Loans for business, including MSMEs.
iii) Rs. 50,000 crore equity infusion through MSME Fund of Funds.
iv) New revised criteria for classification of MSMEs.
v) New Registration of MSMEs through ‘Udyam Registration’ for Ease of Dong Business.
vi) No global tenders for procurement up to Rs. 200 crores, this will help MSME.
All new and existing Micro and Small Enterprises engaged in manufacturing or services including trading activity are eligible to be covered under Credit Guarantee Scheme (CGS) implemented by Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE). CGTMSE has approved 4,35,520 guarantees for an amount of Rs. 30,168.57 crore during 2018-19, 8,46,650 guarantees for an amount of Rs. 45,851.22 crore during 2019-20, 8,35,592 guarantees for an amount of Rs. 36,899.39 crore during 2020-21.
Under Interest Subvention Scheme for Incremental Credit to MSMEs, number of beneficiaries and amount are 13,62,355 and Rs. 541.51 crore during 2019-20 and 9,08,860and Rs. 431.07 crore during 2020-21 respectively.
As part of the Aatma Nirbhar Bharat Abhiyaan, under the Emergency Credit Line Guarantee Scheme (ECLGS), around 1.09 crore MSME borrowers have been provided with guarantee support amounting to Rs. 1.65 lakh crore as on 02.07.2021.
An online Portal “Champions” has been launched on 01.06.2020 by Hon’ble Prime Minister. This covers many aspects of e-governance including grievance redressal and handholding of MSMEs. Through the portal, total 35,361 grievances have been redressed upto 12.07.2021.
As per the information received from Central Statistics Office , Ministry of Statistics & PI, Share of MSMEs in Gross Value Added (GVA) to All India GVA at current prices (2011-12) for the years 2017-18, 2018-19 and 2019-20 was 32.7%, 33.5% and 33.1% respectively.
Establishment of MSMEs
The Micro, Small and Medium Enterprises (MSME) sector consists of private players and investments in this sector are made by the entrepreneurs themselves. The Ministry of MSME does not establish micro, small and medium enterprises in the country. Promotion and development of enterprises is a State subject. However, the Central Government supplements the efforts of the State/UT Governments through various schemes, programmes and policy initiatives for promotion, development and enhancing the competitiveness of MSMEs in the country.
MSMEs can avail the benefits of schemes being implemented by the Government such as Prime Minister’s Employment Generation Programme (PMEGP), Rural Employment Generation Programme (REGP), Micro Units Development & Refinance Agency (MUDRA), Credit Linked Capital Subsidy for Technology Upgradation Scheme (CLCS-TUS), Scheme for Khadi, Village and Coir Industries, International Cooperation Scheme, Procurement and Marketing Support Scheme, Scheme for Credit Guarantee Fund for Micro and Small Enterprises, etc.