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Prime Minister Launches New Schemes to Strengthen MSME Sector
Context
Recently, the Prime Minister has announced the Rs.6,000 crore funded ‘Three’ Schemes for boosting MSME sector during Udyami Bharat programme.
About
What are MSMEs?
- The MSME sector involves micro, small and medium Enterprises that are involved in the production, manufacturing, and processing of goods and commodities.
- This criterion was first introduced by the government of India through the Micro, Small & Medium Enterprises Development (MSMED) Act, 2006
- The central government in 2020 changed the definition of MSMEs (Micro, Small and Medium Enterprises)
- New MSME definition based on investment and turnover (2020)
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Updated MSME Definition |
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Type of enterprise |
Investment |
Turnover |
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Micro |
Rs 1 crore |
Rs 5 crore |
|
Small |
Rs 10 crore |
Rs 50 crore |
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Medium |
Rs 50 crore |
Rs 250 crore |
Highlights of the Event
- About: The Scheme named Raising and Accelerating MSME Performance’ (RAMP) will be the major one among all three.
- Two more schemes got focused in the event,
- Capacity Building of First-Time MSME Exporters’ (CBFTE) scheme
- Prime Minister’s Employment Generation Programme’ (PMEGP)
- Features:
- No global tenders would be undertaken for orders up to Rs.200 crore.
- The Micro, Small, and Medium Enterprises (MSMEs) are firstly to be registered on the GeM portal as the government can access this portal and purchase MSME products.
About the Schemes
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Scheme |
Benefits |
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Raising and Accelerating MSME Performance (RAMP) Scheme |
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Capacity Building of First-Time MSME Exporters (CBFTE) Scheme |
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Prime Minister’s Employment Generation Programme (PMEGP) |
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Significance of MSMEs
- Employment: It is the second largest employment generating sector after agriculture. It provides employment to around 120 million persons in India.
- Contribution to GDP: MSME ministry has set a target to up its contribution to GDP to 50% by 2025 as India becomes a $5 trillion economy.
- Exports: It contributes around 45% of the overall exports from India.
- Inclusive growth: MSMEs promote inclusive growth by providing employment opportunities in rural areas especially to people belonging to weaker sections of the society.
- For example: a Khadi and Village industry require low per capita investment and employs a large number of women in rural areas.
- Financial inclusion: Small industries and retail businesses in tier-II and tier-III cities create opportunities for people to use banking services and products.
- Promote innovation: It provides opportunity for budding entrepreneurs to build creative products boosting business competition and fuels growth.
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Some other Schemes for MSMEs are:
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