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Micro, Small and Medium Enterprises:

GS Paper 2:

Topics Covered: Development process.

 

Context:

According to the data furnished by the Office of the Development Commissioner in the Union Ministry of MSME:

  • Maharashtra tops India’s list in the number of micro, small and medium enterprises (MSME) owned by entrepreneurs from the Scheduled Castes with as many as 96,805 enterprises.
  • Tamil Nadu with 42,997 enterprises and Rajasthan with 38,517 units occupy the second and third slots.
  • The fourth, fifth and sixth slots belong to Uttar Pradesh (36,913 units), Karnataka (28,803 enterprises) and Punjab (24,503 units) respectively.
  • Total: As on January 23, 2022, the number of SC-owned enterprises at the all-India level was 4,53,972, of which micro enterprises accounted for 4,50,835, small – 3,004 and medium – 133.
  • At National level: Generally, the proportion of enterprises owned by Scheduled Caste entrepreneurs in the overall national tally of MSMEs is 6%.

 

Registration of MSMEs in India:

The Udyam system of registration, which came into force on July 1, 2020, is a pre-requisite for any MSME (regardless of the social category of ownership) to avail itself of concessions or benefits from the Central and State governments.

  1. The Registration can be filed online based on self-declaration. Uploading of documents, papers or certificate as proof would not be necessary henceforth.
  2. The basic criteria for MSME classification would be on investment in plant, machinery and equipment and turnover.
  3. Export of goods or services or both would be excluded while calculating the turnover of any enterprise and investment calculation linked to the IT return of the previous year.
  4. Champions Control Room across the country have been made legally responsible for facilitating entrepreneurs in registration and thereafter.

 

Significance and implications of these measures:

The measures would completely change the way MSMEs work, ensure they compete globally besides resulting in newer enterprises entering the fray.

With the stimulus, these enterprises will be in a position to lead to a fast V-shaped recovery the moment the pandemic is brought under control.

 

Significance of MSMEs:

With around 63.4 million units throughout the geographical expanse of the country, MSMEs contribute around 6.11% of the manufacturing GDP and 24.63% of the GDP from service activities as well as 33.4% of India’s manufacturing output.

  • They have been able to provide employment to around 120 million persons and contribute around 45% of the overall exports from India.
  • About 20% of the MSMEs are based out of rural areas, which indicates the deployment of significant rural workforce in the MSME sector.

Sources: the Hindu.