MSME definition, function and role, different schemes/policies

MSME Definition:

The Government of India has enacted the Micro, Small and Medium Enterprises Development (MSMED) Act, 2006.

Micro, Small and Medium enterprises were defined based on the investment level.

Category	Manufacturing Industries	Service Industries
Micro	Less than 25 lakh	Less than 10 lakh
Small	25 L to 5 crore	10L to 2 Crore
Medium	5 crore to 10 crore	2 crore to 5 crore

Functional contributions of MSME

1. Creates large scale employment:

Since the enterprises falling in this sector require low capital to start the business, it creates huge employment opportunities for many unemployed youth. India produces about 1.2 million graduates per year. And, there is no economy in the world that can provide jobs to so many fresh graduates in one year. MSME is the boon for many of these fresh manpower.

2. Economic stability in terms of Growth and Exports:

MSME is a significant growth driver in India, with it contributing to the tune of 8% to GDP. As mentioned in the table, Exports sector in India constitutes about 40% of contribution from MSME alone. Looking at the kind of contribution of MSME to manufacturing, exports and employment, other sectors are also benefitting from MSME.

3. Encourages Inclusive Growth:

Inclusive growth is on top of the agenda of Ministry for Medium, and Small, and Medium sized enterprises for several years. While poverty and deprivation are a deterrent to the development of India, including marginalized sections of society is a key challenge lying before the Ministry of MSME.

4. Cheap Labor and minimum expenses:

In large scale organizations, one of the key challenges is to retain the human resource through an effective human resource management professional manager. But in case of an MSME, the requirement of labor is less, and it does not need a highly skilled laborer. Hence, the indirect expenses incurred by the owner is also low.

5. Simple Management Structure for Enterprises:

MSMEs do not require a huge capital to start. With limited resources available within the control of the owner, decision-making becomes easy and efficient. As in case of a large corporation wherein a specialist is required for every departmental functioning because of complex organizational structure, a small enterprise does not need to hire an external specialist for its management. The owner himself/herself can manage it. Therefore, it can be run single-handedly.

6. Plays an important role in making “Make in India” possible:

Post the inception of ‘Make in India’, a signature initiative by the prime minister of India, the process of incorporating a new business has been made easy. Since the MSME is the backbone in making this dream a possibility, the government has directed the financial institution to lend more credit to enterprises in MSME sector.

Different Schemes/Policy Benefit to the Needy People (write any 15)

• ·         Prime minister employment generation programme(pmegp)
• ·         Performance and credit rating scheme
• ·         Credit guarantee trust fund for micro & small enterprises (cgtmse)
• ·         Interest subsidy eligibility certificate (isec)
• ·         Development of khadi, village and coir industries
• ·         Science and technology scheme
• ·         Market promotion & development scheme (mpda)
• ·         Revamped scheme of fund for regeneration of traditional industries (sfurti)
• ·         Coir vikas yojana (cvy)
• ·         Coir industry technology upgradation scheme (citus)
• ·         Science and technology (s&t) for coir
• ·         Skill upgradation & mahila coir yojana (mcy)
• ·         Export market promotion (emp)
• ·         Domestic market promotion scheme (dmp)
• ·         Trade and industry related functional support services (tirfss)
• ·         Welfare measures (pradhan mantri suraksha bima yojana (pmsby))
• ·         Technology upgradation and quality certification
• ·         Financial support to msmes in zed certification scheme
• ·         A scheme for promoting innovation, rural industry & entrepreneurship (aspire)
• ·         National manufacturing competitiveness programme (nmcp)
• ·         Credit linked capital subsidy for technology upgradation
• ·      ISO 9000/iso 14001 certification reimbursement
•      Marketing support/assistance to msmes (bar code)
• ·         Lean manufacturing competitiveness for msmes
• ·         Design clinic for design expertise to msmes
• ·         Technology and quality upgradation support to msmes
• ·         Entrepreneurial and managerial development of smes through incubators
• ·         Enabling manufacturing sector to be competitive through qms&qtt
• ·         Building awareness on intellectual property rights (ipr)
• ·         Marketing promotion schemes
• ·         International cooperation
• ·         Marketing assistance scheme
• ·         Marketing assistance & technology upgradation (matu)
• ·         Entrepreneurship and skill development programme
• ·         Assistance to training institutions (ati)
• ·         Infrastructure development programme
• ·         Micro & small enterprises cluster development (mse-cdp)

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