After the implementation of LPG act in 1991, globalisation gives new opportunities to the MSME. But coming with a new and
innovative idea is not sufficient to establish a business successfully. Yes, it
is true that market always demand for something new and different, but we
cannot proceed without a proper calculative business strategy and risk
management ability.
One cannot survive in the current dynamic environment until and unless he/she is well aware of challenges and opportunity. Primarily, taking care of MSMEs comes under the role of state government but central government also takes necessary decision and comes with new policies and projects as and when it required. For enhancing the export figure central government has introduced $ 3 billion for the exporters.
For better understanding one must know the
definition of MSME. MSME’s stands for Micro, Small, medium size enterprise.
MSME
consist of (SME) Small and Medium Industries, (ARI) Agro & Rural
Industries, (IF) Integrated Finance, (DATC) Data Analytics and Technical Coordination.
New Looks
of MSME’S
|
||||
S.No
|
Type
|
Manufacturing
|
Services
|
|
1
|
Micro
|
Up to ₹ 25lakhs
|
Up to ₹ 10lakhs
|
|
2
|
Small
|
Between ₹25lakhs to 5crore
|
Over ₹ 10lakhs to ₹ 2crore
|
|
3
|
Medium
|
Over ₹ 5crore to ₹ 10crore
|
Over ₹ 2crore to ₹ 5crore
|
|
Manufacturing:
Plants and machine investment
|
Service:
Investment in equipments.
|
|||
Most of the time MSME’s has to face different challenges such as generation of initial capital, regular flow of funds, optimal scale of operation, supply chain breakdown, dynamic market scenario so on and so forth. That is the reason they have to rely on labour intensive technique. But on the other hand MSME’s contributing 45% in total manufacturing output and 40% in the export figure.
Table 2
Contribution of MSME’s to the country’s economy
|
||
Year
|
Share of MSME in GVA (%)
|
Share of MSME in GDP (in %)
|
2011-2012
|
32.35
|
30
|
2012-2013
|
32.85
|
30.40
|
2013-2014
|
32.71
|
30.20
|
2014-2015
|
32.21
|
29.70
|
2015-2016
|
32.03
|
29.20
|
2016-2017
|
31.83
|
28.90
|
In the above
data, we can see the contribution of MSME’s in the economy growth.
Approximately it contributes 30% in the GDP every year.
Table 3
Year
|
Growth
rate of overall industries in %
|
Growth
rate of MSMES in %
|
2011-2012
|
7.4
|
4.4
|
2012-2013
|
7.8
|
5.6
|
2013-2014
|
6.58
|
9.1
|
2014-2015
|
6.76
|
8.56
|
2015-2016
|
6.6
|
7.62
|
It would not be wrong to say MSME’s are backbone of every developing nation. If we see the growth rate of last 5 years, it is nearly 7.05% every year. That is why central government always comes with the different policies that not only minimize the problems faced by the small and medium enterprises but also to encourage them to invest more. But balanced sub-optimal scale of operation is always required.
Nirtay Rin Vikash Yojana(NIRVIK) provide
coverage to the small exporters. The commerce and industry ministry is also working
on Export Credit Insurance Scheme (ECIS) under which the insurance guaranteed
could cover up to 90% of the principal and interest and guaranteed up to 60%
loss.
Table 4
Table 4
India's trade in services sector in $ Billion
(2014-2018)
|
||||
Year
|
Export
|
Import
|
Trade balance
|
|
2014
|
157.2
|
128.36
|
28.38
|
|
2015
|
156.28
|
123.57
|
32.71
|
|
2016
|
161.82
|
133.53
|
28.29
|
|
2017
|
185.29
|
154.6
|
30.7
|
|
2018
|
205.11
|
176.58
|
28.52
|
|
Source:
ITC Trade Map
|
||||
As per the report published by The Trade Promotion
Council of India, Indian services
sector exporting more and able to maintain the trade balance of $30
billion every year.
Table 5
Table 5
India's trade figure with different countries on
$ billions
|
|||||
Year
|
2014
|
2015
|
2016
|
2017
|
2018
|
world
|
317.54
|
264.38
|
260.33
|
295.85
|
323.06
|
U.S.A
|
42.68
|
40.31
|
41.99
|
46.06
|
51.06
|
U.A.E
|
32.92
|
29.99
|
30.04
|
30.01
|
29
|
China
|
13.34
|
9.58
|
8.92
|
12.49
|
16.04
|
Singapore
|
9.64
|
7.81
|
7.35
|
11.57
|
10.43
|
U.K
|
9.67
|
8.89
|
8.57
|
8.96
|
9.78
|
source:
ITC Trade Map
|
In
previous circumstances India was exporting pharmaceutical products, natural and
cultured pearls, precious and semi precious stones, footwear and many more. But
now Indian exporters have to develop their new business model. After the
implementation of lock down
worldwide, demand of luxurious products fells down. People are
purchasing only those products which are essential for living. It is the clear
indication that in the upcoming 2-3 years, demand of luxurious goods would be
at their minimum level. On the other
hand it is a golden opportunity for those exporters who are exporting essential
goods or (FMCG) fast moving consumable good to different countries. Similarly,
Indian exporter has to think about their new customers from all over the world.
Mostly Indian exporters are targeting the market like USA and Singapore,
but for selling essential goods Indian exporters have to target developing
nations like Bangladesh and South African countries. Cabinet minister Nitin
Gadkari also emphasise Indian exporters to determine the demand of different
countries and design their products accordingly.
It is the time to build relationship with new
countries for not earning profit but also from ethical point of views. It is
not necessary to establish a new e-business channel for exporting, exporters
can also use the existing channels of different companies from all over the
world for supply.
One must have complete information, than only
he/she could get benefited by various schemes and new business models. For
spreading awareness, government gives
privilege to the digital mode of communication. Ministry of micro, small and
medium enterprise has launched mobile applications like NIRYAT app for the
exporters.
Reference:
Annual report of 2018-2019, Ministry of Micro, Small and Medium Enterprises, New Delhi
Imperial tobacco company of India(ITC)
The Economic times
Annual Report of Ministry of consumer affairs 2018.
Annual report of 2018-2019, Ministry of Micro, Small and Medium Enterprises, New Delhi
Imperial tobacco company of India(ITC)
The Economic times
Annual Report of Ministry of consumer affairs 2018.
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