New Delhi: The economic survey reported that industrial growth accelerated in FY24, with manufacturing and construction leading the way. Industrial gross value added (GVA) at constant prices in FY24 was 25 per cent higher than the pre-Covid FY20 levels, affirming broad-based recovery and consolidation.
This acceleration was supported by greater credit offtake, a thrust on capital formation to shore up infrastructure-oriented sectors, and a supportive policy framework said the survey.
As per the latest information available from the Ministry of Statistics and Programme Implementation, the economic survey cited the share of MSMEs in all-India manufacturing output during the year FY22 was 35.4 per cent. Data Dissemination Portal of Directorate General of Commercial Intelligence and Statistics (DGCIS) states that the share of export of MSME-specified products in all-India exports in 2023-24 was 45.7 per cent.
According to the Annual Survey of Unincorporated Sector Enterprises for 2021-22 and 2022-23, the number of unincorporated enterprises in India increased by 5.9 per cent during the period of October 2022-September 2023 in comparison to April 2021 to March 2022. During the same period, gross value added (GVA) per worker increased from Rs 1,38,207 to Rs 1,41,769 and Gross Value of Output (GVO) per establishment increased from Rs 3,98,304 to Rs 4,63,389.
This shows an increased productivity with more efficient use of resources including labour, which is critical for sustained economic growth and competitiveness stated the economic survey.
Further, the survey talked about the Udyam registration portal, launched in July 2020 for MSME’s. It has been instrumental in formalising MSMEs by providing a simple, online, and free registration process based on self-declaration.
As of 05 July 2024, 4.69 crore MSMEs are registered on the Udyam registration portal, including Informal micro enterprises registered on the Udyam Assist platform. Udyam registration helps MSMEs avail themselves of the benefits of the Ministry of MSME schemes. Udyam-registered MSMEs are also eligible for priority sector lending from banks.
The government is implementing two major schemes for MSMEs- one is Prime Minister’s Employment Generation Programme and the other is the Credit Guarantee Scheme (CGS). During FY23, the Prime Minister’s Employment Generation Programme facilitated assistance to 85,167 micro-units with a margin money subsidy of Rs 2,722.17 crore, generating employment for around 6.81 lakh people.
In FY24, this support was extended to 89,118 micro-units with a margin money subsidy of Rs 3,093.87 crore, creating employment opportunities for around 7.13 Lakh as per the survey.
While under the CGS aims to alleviate the credit constraints faced by MSMEs by offering collateral-free loans of up to Rs 5 crore, with a guaranteed coverage of up to 85 per cent. The scheme, since its inception, has approved 91.76 Lakh guarantees amounting to Rs 6.78 lakh crore. In FY24 alone, 17.24 lakh guarantees worth Rs 2.03 lakh crore were approved.
Economic survey even overlook the problems faced by MSMEs. Sectors with widely scattered production units like textiles, and the MSME sector in general, seek solutions to constraints of supply chain management, market access and formalisation.
The survey suggested ensuring support systems to develop MSME projects and their bankability and adequate financing arrangements for such projects, targeted facilitation and incentivisation of employment-intensive MSME segments, progressively easing the compliance requirements with a single-window mechanism for clearances, digitisation of processes and equipping MSMEs to handle these processes with ease, and providing grassroots-level facilitation to ensure market access to MSME products.
