smart city MSME

Micro, small and medium enterprises (MSME) serve as the backbone of the small scale industries in our country. Their importance is very well established by the fact that they have a separate ministry and increasing budgetary allocation with every passing budget. They have also emerged as highly vibrant and dynamic sector of the Indian economy in the last decades of 50 years.

MSME as the backbone of Indian Economy:

Industrial MSME sector plays a vital role in the Indian Economy

  • MSMEs contribute around 45% of manufacturing output.
  • They produce about 40% of exports
  • There are an estimated 13 million MSMEs in India.
  • MSMEs employ more than 69 million people directly and indirectly. According to UNIDO classification, there are 388 energy intensive SME manufacturing clusters.

How does smart city project help MSMEs?

  • A Larger focus on MSMEs specializing in healthcare IT and IT-enabled services, education, logistics, and transport related services.
  • Waste management and separation of waste at the source would play a pivotal role.
  • Need for smart lighting, smart appliances, and their ever growing needs will be satisfied with these industries.
  • Being local entities and relatively of the lower cost, they are bound to grab the best deals and trade offers.
  • An interconnected service and market would enable a strong atmosphere of reliance on every business giving equal opportunities to every other business person.
  • With the infusion of large capital and constant monitoring, small scale industries are to be benefited from the heavy investments and also the expertise available to them.
  • Traditional manufacturing practices will get a boost with the infusion of new technology.
  • Digitalization of records and procedures would help in acquiring easy licenses and the procedures will be faster and transparent.

How are renewable energy and MSMEs connected?

  • Frequent power shortages are the major problems faced by the MSMEs. Renewable energy would ensure a constant power supply.
  • Also, a frequent power supply would ensure a constant water supply. This would help the agricultural sector and increase the farm output and result in better yield.
  • Also an inducement of greater money into research like carbon dioxide research and green technology helps in better optimization.
  • Projects such as Renewable energy Harvesting and Effective Utilization in Agriculture and Engineering Industry (Micro and Small Enterprises) 2015 help in the larger integration of MSMEs into mainstream.
  • Production of components like solar panels, solar cells and solar water heaters are crucial for tapping, solar energy. Giving projects to the small scale industries would enable to lower the cost of production of solar panels are very high.
  • According to recent WTO ruling India is supposed to import solar panels from US where a hard fought case went into US’s favor. If the requisite technology and materials is available in India, with a cheaper and skilled labor solar panels of lesser cost could be produced. It would also serve as an impetus to make in India programme.
  • Also projects like tidal energy, thermal energy and hydroelectric projects require several small components. This is where MSMEs play a crucial role with production of such small components with record time and efficiency and with very less cost.
  • Power holidays by certain state governments affect the production of these industries. They can be resolved by the renewable energy.
  • Widespread adoption of commercially available technologies to improve energy efficiencies and use of renewable energy in process applications.
  • There is significant scope to enhance the penetration of Renewable technologies in SME sector.

How do digital India initiatives help MSMEs?

Digital India is a flagship program launched with much fanfare and is touted to be as one among the pet projects of Namenda Modi.  Several attempts have been made in the past to bring in e-governance at large scale.  In order to transform the entire ecosystem of public services through the use of information technology, Digital India program has a vision of transforming India into a digitally empowered society and knowledge economy.

Digital India initiatives would help MSMEs attain several of their objectives:

  • Global SME business summit 2014 was organized by the ministry of MSME in partnership with CII. A range of topics and several initiatives were discussed and a framework was agreed upon.
  • The finance provisioning reforms, regulatory systems, taxation reforms are vacuum policy been in an institutional format and framework is exclusively supported through advocacy.
  • The MSMEs business has been ushered through telecom distributors.
  • Several tech giants connect the MSMEs to buyers, suppliers, financial institutions and a whole gamut of other agencies and charge a small fee for such services.
  • Raw materials for various industries and chip technologies can be procured at very cheap prices.
  • If the SMEs seek a type of raw material and profit investment between rupees five to 7 rupees corer, there would be a discount of four percent which is translated into point amount. A large amount of credit value and support is provided to MSMEs with institutional support.
  • Banks like MUDRA and small savings bank give loans specifically to MSMEs with little or no interest rate.
  • An encouragement of large levels of credit acceptance for SME loans compared with the usual high rate of rejection in the MSME borrowers in India.
  • New age platforms enable the buyers to reach suppliers directly and this leads to eliminating the middlemen and thus bringing down corruption largely.
  • E-commerce would get a large boost when small scale industries have access to large scale market and the pricing is transparent and is always monitored.
  • A well-established regulatory mechanism would go a long way to keep the rules tight.

Considering all the above points we can come to a conclusion that all the new initiatives would help MSMEs to achieve greater production values and larger market. All of them are interdependent on each other and with an ever increasing market and equally increasing market; it would serve as a boon to many lakhs of people who are dependent on for its employment and survival. MSMEs are here for the long run.

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