In India, MSMEs contribute nearly 8% of the country’s GDP, around 45% of the manufacturing output, and approximately 40% of the country’s exports. It won’t be wrong to refer to them as the ‘Backbone of the country.’ The Government of India has introduced MSME or Micro, Small, and Medium Enterprises in agreement with the Micro, Small, and Medium Enterprises Development (MSMED) Act of 2006. These enterprises primarily engaged in the production, manufacturing, processing, or preservation of goods and commodities.MSMEs are an important sector of the Indian economy and have contributed immensely to the country’s socio-economic development. It not only generates employment opportunities but also works hand-in-hand towards the development of the nation’s backward and rural areas. According to the annual report by the Government (2018-19), there are around 6,08,41,245 MSMEs in India.
Key Takeaways of New MSME Definition introduced in ‘Aatm Nirbhar Bharat Abhiyan‘ or Self-reliant India Scheme 2020 by Government of India.
- Collateral Free Loans to MSMEs
- MSME Loans worth Rs. 3 lakh crore
- The moratorium period offered is 12 months
- Manufacturing and Service MSMEs shall be considered as the same entities
- Repayment Tenure of 48 months
- 100% Credit Guarantee
- To benefit approx. 45 lakh units
Features of Ministry of MSME (MoMSME)
- Works for the welfare of artisans and workers
- Provides credit limit or funding support from banks
- Promotes entrepreneurship development and skill up-gradation via specialized training centers
- Supports technology up-gradation, infrastructural development, and modernization
- Offers assistance for improved access to domestic and export markets
- Provides modern testing facilities and quality certification
- Supports packaging, product development, and design intervention
