{"id":245278,"date":"2023-05-29T20:58:53","date_gmt":"2023-05-29T15:28:53","guid":{"rendered":"https:\/\/blog.forumias.com\/?p=245278"},"modified":"2023-05-29T20:58:53","modified_gmt":"2023-05-29T15:28:53","slug":"india-needs-to-fill-the-vacuum-of-its-mid-sized-enterprises-space","status":"publish","type":"post","link":"https:\/\/forumias.com\/blog\/india-needs-to-fill-the-vacuum-of-its-mid-sized-enterprises-space\/","title":{"rendered":"India needs to fill the vacuum of its mid-sized enterprises space"},"content":{"rendered":"\n

Source<\/strong>: The post is based on the article\u00a0\u201cIndia needs to fill the vacuum of its mid-sized enterprises space<\/strong>\u201d published in Live Mint <\/strong>on\u00a029th<\/sup> May 2023<\/strong>.<\/p>\n

Syllabus: <\/strong>GS 3 \u2013 Changes in Industrial Policy and their effects on Industrial Growth<\/strong><\/p>\n

Relevance: <\/strong>concerns with MSMEs<\/p>\n

News<\/strong>: India has recently focused more on encouraging entrepreneurship through a variety of programmes and initiatives.<\/p>\n

What are some of the initiatives that encourage entrepreneurship?<\/strong><\/h2>\n

The government of India launched a Startup India<\/strong> in 2016. This increased the recognised startups from 442 in 2016 to 92,683 in 2023. The Startup India Seed Fund Scheme<\/strong> has also funded many businesses.<\/p>\n

However, along with these initiatives, there is also a need to scale-up the firms.<\/p>\n

Why is there a need to scale-up firms?<\/strong><\/h2>\n

As per the MSME Annual Report of Government of India (<\/strong>2022-23), the micro sector makes up for over 99% of the total estimated number of MSMEs.\u00a0The small sector has 0.33 million enterprises and the medium sector has only 5,000 firms.<\/p>\n

Therefore, India needs policies that transform firms from a micro to mid-size stage because<\/strong> it is the mid-sized firms which hold greater potential to grow into a large firm.<\/p>\n

According to a Mckinsey report,<\/strong> India is home to over 600 large firms that are 11 times more productive than average and contribute around 40% to total exports.<\/p>\n

Therefore, to utilize this potential, India needs to promote micro firms and overcome its challenges.<\/p>\n

What are the challenges faced by micro firms?<\/strong><\/h2>\n

Click Here to Read<\/strong><\/a><\/p>\n

Hence, scaling up is required for micro firms. This is because scaling-up enables<\/strong> firms to adopt newer technology, get access to different markets, and streamline production processes, along with boosting productivity.<\/p>\n

What measures have been taken to scale up micro firms?<\/strong><\/h2>\n

There are two major areas to focus for improving the ease of doing business and transitioning to larger firms – a)<\/strong> to simplify as well as streamline the regulatory framework, and b)<\/strong> promote access to capital.<\/p>\n

In the context of streamlining the regulatory framework<\/strong>, finance minister Nirmala Sitharaman stated that there has been reduction in compliances along with decriminalizing various legal provisions.<\/p>\n

This is important because a high regulatory burden disincentivizes firms to grow and firms prefer to stay small in size and outside the ambit of the formal system.<\/p>\n

Additionally, various schemes have attempted to ease access to credit<\/strong>, especially for firms that have remained outside the formal credit system.<\/p>\n

For instance,<\/strong> the Udyam Assist Platform<\/strong>, functions with the goal of bringing informal micro enterprises under the formal ambit to help them avail benefits under India\u2019s priority sector lending rules.<\/p>\n

Another notable scheme is PM SVANidhi (Prime Minister Street Vendor\u2019s Atmanirbhar Nidhi)<\/strong> that provides credit to small entrepreneurs such as hawkers and street vendors.<\/p>\n

Must Read: <\/strong>MSMEs: Significance, Challenges and Solutions – Explained<\/strong><\/a><\/p>\n

What can be the way ahead?<\/strong><\/h2>\n

MSMEs form the backbone of the economy. Therefore, it is a huge responsibility to ensure that the schemes initiated for aiding growth among micro and small firms are implemented effectively.<\/p>\n","protected":false},"excerpt":{"rendered":"

Source: The post is based on the article\u00a0\u201cIndia needs to fill the vacuum of its mid-sized enterprises space\u201d published in Live Mint on\u00a029th May 2023. Syllabus: GS 3 \u2013 Changes in Industrial Policy and their effects on Industrial Growth Relevance: concerns with MSMEs News: India has recently focused more on encouraging entrepreneurship through a variety… Continue reading India needs to fill the vacuum of its mid-sized enterprises space<\/span><\/a><\/p>\n","protected":false},"author":10320,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[9],"tags":[216,10501],"class_list":["post-245278","post","type-post","status-publish","format-standard","hentry","category-public","tag-gs-paper-3","tag-live-mint","entry"],"jetpack_featured_media_url":"","views":{"total":0,"cached_at":"","cached_date":1704949354},"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/245278","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/users\/10320"}],"replies":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/comments?post=245278"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/245278\/revisions"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=245278"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/categories?post=245278"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/tags?post=245278"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}