Executive a contribution of 38% to India’s

Executive
Summary

The Micro, Small and Medium Enterprises (MSMEs)
sector in India have done well in a buoyant economy. India is poised to emerge
as one of the leading economies of the world and it is projected to be the second
largest by 2050.  The MSME sector is considered the backbone of
Indian economy with a contribution
of 38% to India’s GDP, 40% share of exports and 37% share of the manufacturing
output, apart from it employing almost 120 million across the country. It is
well understood that the MSME will play a crucial role in furthering growth,
innovation and commerce in India. A major thrust, is consequently, is the need
of the hour to strengthen it and make it well equipped to steer the country
towards growth.

2017 saw developments
in the country and outside that would have major significance in the trajectory
of MSME growth. The launch of the Goods & Services Tax, was a major game
changer and is expected to
benefit MSMEs not only with simpler tax structure but also with aspects such as
improved technology adoption in order to comply with GST system.  Secondly, the government has also announced
major sops to address the credit paucity for MSMEs by doubling their credit
guarantee cover from Rs. 1 crore to Rs. 2 crore and enhancing their cash credit
limit from 20% to 25%. Further, the government’s focus on digitalization of
business processes and regulations through self-attestations and certifications,
single window clearance, online approvals, etc will further strengthen the MSME
sector. Another significant move is the Zero Effect Zero Defect Scheme launched by the Prime Minister, Mr. Narendra Modi to promote
manufacturing excellence amongst MSMEs while minimizing the adverse affect on
the environment.

Other major
developments comprises of  the launch of
the National SC/ST Hub for building the capacity and enhancing the market
linkages of the underprivileged sections of society, the Insolvency and
Bankruptcy Code, and labour market reforms. The Ministry has also launched the MSME Databank in
order to create an online repository of MSMEs in India and their various
products and services. Moreover, the initiatives undertaken by CII have been
able to affect a tangible change in the MSME ecosystem in the country. CII is
aimed at working synergistically with the government and actively champion the
cause of a robust MSME sector in India through its ongoing and upcoming
initiatives. A technologically vibrant and
internationally competitive SME sector is what the sector will strive to
achieve thus sustaining its contribution to the national income, employment and
exports.