Micro Small Medium Enterprises
- Micro, Small, and Medium Enterprises (MSMEs) play a vital role in the Indian economy, accounting for about 30% of the country's Gross Domestic Product (GDP), 45% of the manufacturing output, and employing around 11 crores of the Indian population.
Micro Enterprises
- Net investment in plant and machinery or equipment upto Rs. 1 crore and net turnover ≤ Rs. 5 crores.
Small Enterprises
- Net investment in plant and machinery or equipment ≤ Rs. 10 crores and net turnover ≤ Rs. 50 crores.
Medium Enterprises
- Net investment in plant and machinery or equipment ≤ Rs. 50 crores and net turnover ≤ Rs. 250 crores.
Schemes for MSME development
1.Prime Minister Employment Generation Programme (PMEGP)
Aim-
- The scheme aims at providing financial assistance to self-employment ventures
Eligibility -
- Individuals above the age of 18 can apply for this scheme.
Benefits-
- The bank-financed subsidy program supports the establishment of new micro-enterprises in the non-farm sector.
- Margin Money subsidy on Bank Loan is available for projects up to Rs. 50 Lakh in the manufacturing sector and Rs. 20 Lakh in the service sector.
- The range of margin money subsidy on Bank Loan is from 15% to 35%.
- Special category beneficiaries such as SC/ST/ Ex-Servicemen/ NER/ Women/ PH/ Minorities are eligible for higher subsidies.
- For special category beneficiaries, the margin money subsidy is 25% in urban areas and 35% in rural areas.
2.Credit Guarantee Scheme for Micro & Small Enterprises (CGTMSE)
- The scheme aims at motivating first generation entrepreneurs towards self-employment by providing credit guarantee funding for third-party guarantee-free / collateral free loans.
Benefits-
- Guarantee on credits for loans up to INR 2 crores, without third-party guarantee and collateral.
- Guarantee on coverages range from 75% (others) to 85% (Micro Enterprise up to INR 5 lakh).
- 50% of the coverage is for retail activity.
3.National SC-ST Hub
- The scheme is aimed at providing professional support to entrepreneurs belonging to the Scheduled Castes and Scheduled Tribes.
- The scheme provides 25% subsidy on purchase of plant & machinery / equipments.
- The scheme aims to provide marketing and mentoring support to SC/ST enterprises and entrepreneurs.
- It will reimburse transaction costs and facilitate participation in exhibitions and vendor development programmes.
- The scheme also involves collecting, collating, and disseminating information about SC/ST enterprises and entrepreneurs.
- Trained candidates of the Skill Development programmes will receive trade-specific tool kits and free skill training under the scheme.
4.ASPIRE scheme
- In 2015, the Indian government launched the ASPIRE scheme.
- The primary objective of ASPIRE is to establish a network of technology centres.
- ASPIRE also aims to set up incubation centres to promote entrepreneurship and innovation in agro-industry.
- The scheme seeks to accelerate the growth of startups and support rural industries.
5.Zero Defect Zero Effect
- The Zero Defect Zero Effect (ZED) program was launched in 2016 with two objectives: to promote production methods that result in products with no defects, and to minimize the impact on the environment.
6.Raising and Accelerating MSME Performance (RAMP)
- The RAMP scheme aims to enhance the performance of MSMEs.
- The scheme promotes technology upgradation, innovation, digitization, market access, credit, greening initiatives, and more.
- It involves the active participation of state governments.
- The RAMP scheme is a Central Sector Scheme.
- It is supported by the World Bank.
7.Scheme of Fund for Regeneration of Traditional Industries (SFURTI)
- The Scheme of Fund for Regeneration of Traditional Industries (SFURTI) aims to establish traditional artisans and industries into clusters.
- The goal is to support them towards long-term sustainability and competitiveness.
- Financial assistance of up to 90% of hard intervention costs (physical infrastructure) and the entire cost of soft intervention (skill, software, etc.) will be provided.
- In the Northeastern Region (NER), Jammu & Kashmir (J&K), and Hill Areas, the financial assistance can go up to 95% of hard intervention costs.
8.Modified Market Development Assistance (MMDA) Scheme under Khadi Vikas Yojana
- The MMDA Scheme has been introduced to add value to Khadi and enable its products to be sold at market-oriented prices.
- The primary objective of the scheme is to decontrol and de-link the sales price from the Cost Chart.
- Under the MMDA Scheme, a grant of 30% is provided on the Prime Cost of Khadi and Polyvastra.
9.Pradhan Mantri Mudra Yojana
- The Pradhan Mantri Mudra Yojana was launched in 2015.
- The scheme aims to provide loans at low rates to micro-finance institutions and non-banking financial institutions.
- These institutions then provide low-interest loans to startups and MSMEs.
- The loans provided under the MUDRA scheme can go up to Rs 10 lakh.
There are three categories of businesses, which can avail loans under MUDRA loan for startups-
Category 1-
- Shishu, which is for new businesses. Loans up to Rs 50,000 can be availed.
Category 2-
- Kishor, which is a mid-aged business. Loans up to Rs 5 lakh can be availed.
Category 3-
- Tarun, which is an existing, experienced business. Loans up to Rs 10 lakh can be availed.
Ease Of Doing Businesses
- The Ease of Doing Business (EoDB) index is a ranking system established by the World Bank Group.
A nation's ranking on the index was based on an average of 10 sub indices:
- Starting a Business of all.
- Dealing with Construction Permits.
- Getting Electricity.
- Registering Property.
- Getting Credit.
- Protecting Minority Investors.
- Paying Taxes.
- Trading across Borders.
- Enforcing Contracts.
- Resolving Insolvency.
Ranking of India-
- Among the chosen 190 countries India ranked 63rd in Doing Business 2020.
- India jumps 79 positions from 142nd (2014) to 63rd (2019) in 'World Bank's Ease of Doing Business Ranking 2020
Some of the Initiatives taken by government to enhance Ease of doing business
- Permanent Account Number (PAN), Tax Deduction & Collection Account Number (TAN), Director Identification Number (DIN) have now been merged into a single form (SPICe) for company incorporation.
- The Companies Act has been amended to eliminate the requirement of a common company seal.
- The Central Board of Excise and Customs (CBEC) has implemented the ‘Indian Customs Single Window Project’ to facilitate trade.
- Traders can file all documents electronically through the e-Sanchit online application system.
- The Commercial Courts and Appellate Division of High Courts have been established in Mumbai and Delhi.
- The Insolvency and Bankruptcy Code of 2016 has introduced new dimensions in resolving insolvency in India.
- The Goods and Service Tax was introduced to simplify the taxation system.
- A computerized risk management system has brought transparency and reduced the frequency of custom inspections significantly.