Small businesses, big impact
A six-year low economic growth raises eyebrows as it screams for reforms. As India copes with a 4.5 per cent GDP growth registered in the third quarter, a revival story must be etched. The dismal climate prevailing over the manufacturing sector has attracted countless expert analysis and remedy. Same has been the norm for a low-investment mood. While reforms to reignite industrial engines is need of the hour, there is a branch that India must dearly focus on for surprise recovery. The micro, small and medium enterprises (MSMEs) remains the trump card India can utilise. Touted as a key driver of developing the nation's economy, MSMEs account for about 45 per cent of manufacturing output and more than 40 per cent of exports. They contributed 28 per cent to India's GDP in 2016-17 and employ more than 100 million people. In a recent statement, MSME minister Nitin Gadkari asserted how his ministry has sought an increased budgetary allocation in the new fiscal year amounting to Rs 12,000 crore against the current Rs 7,011 crore. MSMEs presence in every sector as partners and suppliers make them a crucial unit in the fray. They are also instrumental in pushing employment and entrepreneurship — something India can take massive advantage of given its young demographic levels and a conducive start-up climate. MSMEs haven't been out of India's agenda as the Modi dispensation has taken several steps to improve MSMEs. Back in 2018, the Prime Minister launched a scheme to grant quick access to credit; loans of up to Rs 1 crore sanctioned online in less than an hour. This was to negate the negative impact of ailing NBFCs and demonetisation that had presented a severe credit crunch. The finance minister also urged large corporates to quickly clear large dues to MSMEs while asking banks not to declare stressed assets of MSMEs as NPA till March 31, 2020. Clear attention on boosting MSMEs is good for the sector which contains more than 60 million enterprises.
MSMEs fill the gap, connect dots, make ends meet for larger fishes and hence are easily attributed to being central to India's economy. With the advent of digitisation and the emergence of e-commerce platforms, MSMEs can take a leap to yield more and keep up with the changing business climate. In fact, Amazon's announcement to invest one billion dollars to digitalise at least 10 million MSMEs aims to open the world for the latter. With Amazon's bulky investment, MSMEs can grow their business by selling online globally, and gradually raising the export bar much to country's benefit. Amazon's investment also offers a boost to the dormant 'Make-in-India' sentiment as products will reach global buyers. Amazon's Global Selling programme will allow businesses to sell on global marketplaces, widening the scope for their sale. Along with this, Amazon will set up digital haats in 100 cities, villages and communities to aid MSMEs integration into the digital economy. These haats will provide services such as e-commerce onboarding, imaging and cataloguing, warehouse space, logistics, digital marketing, and compliance to bridge the shifting gap that MSMEs may face in the digitisation drive. But, overall, Amazon's plan heralds a good development agenda for MSMEs. If MSMEs progress, it will be a major economic uptrend for India as they will invariably generate employment while reshaping India's retail landscape. The government's plan to create double asset funds in the upcoming budget for private equity firms and corporates interested in investing in the MSME sector will also serve as a major push.
