Small and medium enterprises in India play a critical role in the country’s economy, owing to which the government has undertaken several measures to promote its holistic growth.
- SMEs account for 40% of India’s yearly exports.
- SMEs account for nearly 45% of domestic industrial output, as per a 2017 report.
Still, before proceeding to learn about the various government measures to improve conditions in this sector, one must start by assessing the basics, such as MSME full form and its meanings.
MSME full form: What does it denote?
MSME refers to Micro, Small and Medium Enterprises.
A microenterprise refers to any business where the investment in a plant and machinery is within Rs.25 lakh. A small enterprise is any company with investments and machinery worth between Rs.25 lakh and Rs.5 crore. Lastly, medium enterprises refer to those companies that start with initial investments ranging between Rs.5 crore and Rs.10 crore.
The Government of India has put in place a dedicated Ministry to overlook the growth and welfare of these enterprises.
This division is only applicable for businesses dealing with the production or manufacture of goods. Additionally, plants handling preservation and processing of goods also come under this classification. The slab differs for service-oriented businesses.
For this sector, a micro enterprise is any business where the equipment-related investment is lower than Rs.10 lakh. For a small service enterprise, this investment can range between Rs.10 lakh and Rs.2 crore. A medium service enterprise invests anywhere between Rs.2 crore and Rs.5 crore on its equipment.
- The SME sector employs more than 60 million people in India.
After understanding what MSME’s full form signifies, one should proceed to learn about the various steps taken by the Indian government to ensure the growth of the sector.
Different MSME schemes
The schemes listed below are just some of the initiatives undertaken by the government to ensure the prosperity of SMEs.
- Scheme of Fund for Regeneration of Traditional Industries
Development of khadi, coir clusters and other village industries are the prime concerns of this scheme. Other sectors that come under SFURTI include honey and bamboo industries.
Under the scheme, eligible applicants can avail of a range of benefits, including business development assistance, support for marketing campaigns, training facility, provision for better equipment, and more.
- Udyogini Scheme
As the name suggests, Udyogini scheme helps women entrepreneurs set up their micro, small or medium enterprises. The main objective here is to promote self-reliance amongst women in India, especially in the rural sectors.
Every SME needs a solid financial plan, and the Indian government assists women entrepreneurs by providing the necessary economic as well as holistic assistance under this scheme.
Aspiring women business owners can look forward to interest-free business loans under the scheme. A total of 88 SMEs would be granted benefits under this scheme across each district in India.
- Credit Linked Capital Subsidy Scheme
Small and medium enterprises often lack the necessary financial backing to purchase or integrate cutting-edge technology or equipment. With the CLCSS initiative, SMEs can easily avail of financial help at subsidized rates whenever they want to update their machinery.
- 15% subsidy on capital is available for small scale industries under CLCSS, with a maximum eligible subsidy of Rs.15 lakh.
- Almost 63,000 MSME units have availed benefits under this scheme since its inception in 2000.
- Prime Minister’s Employment Generation Programme
PMEGP’s primary goal is to create greater employment opportunities for India’s youth by offering credit-linked subsidy on business loans. The self-employment opportunities under this scheme are available to all, except agricultural enterprises.
- MSMEs generate around 1.3 million jobs each year.
With this subsidy, availing MSME loans has become an efficient financial solution for SMEs. The decreased repayment burden can significantly help during the formative years of small scale business.
Several other initiatives, such as Credit Guarantee Scheme for Micro and Small Enterprises (CGTMSE), A Scheme for Promoting Innovation, Rural Industry & Entrepreneurship (ASPIRE) greatly help in encouraging the Indian populace to establish their own small scale enterprises.
Reputed NBFC Bajaj Finserv also pitches in with pre-approved offers on loans which simplify the application procedure and makes it less time-consuming for borrowers.
One of the benefits of MSME loans is that they are affordable, easing the repayment of such debt for small-scale businesses. Nevertheless, before applying, ensure whether you are eligible for the same by considering the MSME full form and other criteria, mentioned above.