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Brain-booster / 02 Oct 2023

Brain Booster for UPSC & State PCS Examination (Topic: MSME Sector in India)


Why in Broadcast?

  • Recently G20 declaration highlighted the challenges MSMEs, particularly in developing countries, face with respect to access to information. For this they welcome Jaipur Call for Action for enhancing MSMEs’ access to information to promote the integration of MSMEs into international trade.

Definition of MSME

  • MSME stands for Micro, Small And Medium Enterprises.
  • The Central Government, notifies the following criteria for classification of micro, small and medium enterprises, namely:
  • A micro enterprise, where the investment in Plant and Machinery or Equipment does not exceed one crore rupees and turnover does not exceed five crore rupees.
  • A small enterprise, where the investment in Plant and Machinery or Equipment does not exceed ten crore rupees and turnover does not exceed fifty crore rupees.
  • A medium enterprise, where the investment in Plant and Machinery or Equipment does not exceed fifty crore rupees and turnover does not exceed two hundred and fifty crore rupees.

India’s MSME Sector

  • These MSMEs make a substantial contribution, accounting for around 30 percent of the country’s GDP.
  • This sector plays a pivotal role in driving socioeconomic development, particularly in semi-urban and rural areas, fostering entrepreneurship.

India’s Global Digital Impact

  • India has outpaced advanced economies in terms of the speed and extent of digital transformations, both domestically and in exports.
  • In 2016-17, India exported digitally delivered services worth $89 billion, as per a UNCTAD 2018 report.
  • The OECD noted that India’s share of global estimated digital trade exports surged by approximately 400%, growing from 1% in 1995 to nearly 4% in 2018.

MSMEs and Digital Services

  • With the projected growth of internet subscribers in India to reach 800 million by the end of 2023, small businesses are increasingly integrating digital services into their operations.
  • These services include e-commerce platforms, social media for marketing and communication, and digital payment applications, among others.
  • Indian MSMEs are also adopting digital service inputs like smartphone-based marketing and communication services to expand their market reach and strengthen customer relationships.

Services Rendered by MSME Office

  • Advising in policy formulation for the promotion and development of MSMEs.
  • Dissemination of schemes of Ministry of MSME through its network of field offices.
  • Providing techno-economic and managerial consultancy, common facilities and extension services to MSMEs.
  • Providing facilities for technology upgradation, modernisation, quality improvement and infrastructure.
  • Developing Human Resources through training and skill upgradation.
  • Facilitating cluster development as a vehicle for MSME Ecosystem development.
  • Providing economic information services.
  • Maintaining a close liaison with the Central Ministries, NITI Aayog, State Governments, Financial Institutions and other Organisations concerned with development of MSMEs.
  • Enhancing trade competitiveness to ensure increase in share of export basket.