PR No – 4
8th November, 2023
Data-Driven recommendations by PHDCCI Policy Forum needed for effective implementation of MSME Policy
PHDCCI organised an inaugural event of its Policy forum with the theme “Challenges and Opportunities for MSMEs: A Research Roadmap” on 7th November, 2023 at PHDCCI house New Delhi.
Dr. Rajneesh, Additional Secretary and DC, Ministry of MSME in his Keynote address, emphasized the vital role of Indian states in effective implementation of MSMEs policy. He noted that while many state policies primarily favor large corporations, some states lack dedicated departments for MSMEs. Despite variations in state performance, the MSME sector stands as the second-largest employer in India. He highlighted India’s remarkable economic resilience, with a CAGR of 5.5% from 2012 to 2022, outperforming countries like the USA, UK, and Germany. Dr. Rajneesh also pointed to the potential opportunities for Indian enterprises especially MSMEs particularly in the wake of current challenges faced by the Chinese economy.
In addition, he discussed the challenges like formalization gaps and the efforts needed to bridge this gap. He shed light on the institutional engagement of MSME ministry with various stakeholders, which resulted in a notable increase in registrations under the Udyam portal from 1.5 crore to 3 crore as from January 2023 till now.He also discussed the collaborative work of Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) and SIDBI to address the challenge of credit gap faced by MSME sector of the country.
Furthermore, he informed that in January 2023, a proposal was made by the Ministry of MSME to the Ministry of Finance, seeking additional credit infusion for CGTMSE, which has been approved. The Ministry has agreed to provide an additional credit infusion of 9,000 crores.
While concluding his note of address, he emphasized the need for evidence-based policy-making and encouraged the PHDCCI to continue its research efforts.
Dr. Ranjeet Mehta, Executive Director, PHDCCI, expressed the Chamber’s dedication towards creating a platform for dialogue and research in support of the sector and emphasized the pivotal role of MSMEs in driving economic growth and employment opportunities in India.
He further stated that though the sector presents substantial opportunities, it is currently facing three key challenges i.e. First, access to finance, particularly in Tier 2 and Tier 3 cities. Second, there is a pressing need for improved access to technology, especially in remote areas and the third challenge is better access to markets. While the Government e-Marketplace (GeM portal) exists, more efforts are needed in this direction to provide better market access to MSMEs
Prof. Manoj Pant, Advisor, PHDCCI Policy Forum while discussing the main objectives of the policy forum, said that three national-level issues are important for the growth of economy and needs to be researched in detail. The first pertains to digitalization of MSMEs, the second is the cultural aspects of startups, and the third focuses on trade policies. Alaso, as India has already committed to climate change reduction initiatives, there are two specific areas the Policy forum needs to do research in order to raise awareness. The first area is the Carbon border adjustment mechanism (CBAM) and the second area involves the vital components of the mechanism responsible for recycling or disposing of environmental waste.
Dr. Pritam Banerjee, Head, Centre for WTO studies, IIFT in his address said, Tariff negotiations hold great significance for the country. From a negotiator’s perspective, the critical question that needs to be addressed is what distinguishes an MSME from a large enterprise. Furthermore, in the context of negotiations, it is essential that the industrial and trade policies are closely aligned and work in harmony.
Dr. James Nedumpara, Head (CTIL) & Head (CWS) IIFT in his address referred to MSMEs as the backbone of the economy, highlighting their significant contribution to India’s economic landscape. They account for 30% of India’s GDP, 50% of its exports, and provide employment for 40% of the country’s non-agricultural workforce. It’s worth noting that only 5% of India’s unorganized sector has harnessed the benefits of a fully developed digital infrastructure as compared to 56% in ASEAN economies.
The event was moderated by Ms. Sawti Kumar, Head, PHDCCI Policy Forum, New Delhi.
The event also featured the release of the knowledge report titled ‘MSME Structure in India: A Structural Analysis’ providing in-depth comparison of structure of MSMEs at national and state-level. The analysis highlighted that National MSMEs Policy should encompass the unique features of states like North-eastern, thus permitting adaptability while adhering to best practices.
Additionally, remarks were made by Knowledge Partners, M.M.A. Beg, General Secretary, Association for Environment and Development Research (AEDR) and Dr. Rajat Kathuria, Dean & Professor, Shiv Nadar University on how these institutions will contribute further in the field of research and support Policy Forum in its research agenda.
PHD Chamber of Commerce and Industry