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"Within the MSME sector there are three verticals and the vertical which is negatively handicapped in this is the lower end, Micro industries, that’s where we need to do aggressive positioning of what the Govt. Policies are, and for that, we need some kind of overarching entity which is willing to do the advocacy of that,” said Das.
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Micro, small and medium enterprises (MSME) are the mainstay of the Indian economy. The sector contributes about 45 per cent to manufacturing output, more than 40 per cent of exports, over 28 per cent of the GDP while creating employment for about 11.1 crore people, which in terms of volume stands next to the agricultural sector.
“China got its act together in the early 2000s and ended up accounting for 30 per cent of global manufacturing in 2019 ahead of the United States. In India though we have the MSME Act and MSME Ministry, it has taken some time, we have 1/6th of the global population but we contribute to only 3.5 per cent of the global wealth. India has about 63 million MSME, employing about 40 per cent of India’s workforce and the contribution to the GDP is only 30 per cent. If we look at the MSME space being vacant in India, most certainly it is," said Dakshita Das, Former Civil Servant, Additional Member, Ministry of Railways, Former MD and CEO of National Housing Bank & Member Board Of Directors at Bank of India.
The Union government has undertaken significant reforms in the last few years to create a conducive business environment. “As we speak today many changes have come in, a lot of focus has come in from the government’s side as far as this sector is concerned. Last year's budget a lot of incentives were given to this sector, secondly, the ‘Atmanirbhar Bharat package’ has been a very big game-changer," noted Das.
Speaking about the ECLGS scheme and the pandemic impact, Das said, “Pandemic has been a bit of a game-changer, but let's understand that many changes have happened because some businesses are not quite relevant now, hospitality is one the major case. But if we look at the data that ECLGS throws up, we see a lot of claims coming from the trading sector including small Kirana shops now that’s big. These were on the verge of getting wiped out but they have benefited from the scheme. Gujarat has led the way, followed by Maharashtra, Tamil Nadu and UP. Perhaps one can conclude ECLGS has been the biggest support the sector has seen.”
Expressing her views on what can we learn from China, Das said that one of the biggest problems we are facing is the lack of adequate dissemination of government policy down to the person at the grass-root level. "Within the MSME sector there are three verticals and the vertical which is negatively handicapped in this is the lower end, Micro industries, that’s where we need to do aggressive positioning of what the Govt. Policies are, and for that, we need some kind of overarching entity which is willing to do the advocacy of that,” she said.
Das was speaking at BW SME World Presents Emerging Business Summit & Awards.