The way forward for MSMEs

Micro, small and medium enterprises (MSMEs) have long been considered the backbone of the Indian economy. As per government data registered between 2020 and 2023, over 12 crore people were employed in this sector. Accounting for approximately 30 per cent of India’s GDP, over 40 per cent of manufacturing output, and nearly 45 per cent of exports, MSMEs are a critical pillar in the economic architecture. They penetrate the rural and semi-urban areas, which mitigates the rural-urban divide. However, these enter-prices face a plethora of challenge that stymie their potential.

Skill Shortage is Barriers to Growth

Among the major problems plaguing Indian MSMEs today is skill shortage. There is a scarcity of skilled workforce, impacting work quality and inhibiting the sector’s ability to compete in the market. The lack of technology adoption and technical expertise hampers innovation, limiting their growth potential.

The need for concerted efforts

Providing subsidies or incentives for digital tools and technologies can encourage adoption. Furthermore, public-private partnership could be a viable solution for infrastructure development. Collaboration with educational institutions and industry bodies to design relevant training modules can bridge the skill gap.

Encouraging MSMEs to explore international markets through trade fairs and export promotion schemes can unleash new business opportunities. It’s also essential to streamline compliance procedures, reduce bureaucratic hurdles, and address the operational challenges afflicting the sector.

Improved financial resources

Considering that limited access to credit and high borrowing costs are serious obstacles for enterprises, experts believe that measures like simplifying the credit lending process and introducing more MSME –friendly financial products are imperative.

By empowering MSMEs with access to finance, technology, and skill development, India can harness their potential not only to bolster economic growth but also a generate huge employment opportunities.

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