MSMEs aren't one-size-fits-all: Secretary calls for tailored policies

NITI Aayog, industry to nudge MSMEs to embrace tech

The central government is pushing for policy reforms specific to the unique problems and demands of various segments of micro, small and medium enterprises (MSMEs) without viewing them as a homogeneous sector, Subhas Chandra Lal Das, secretary of the MSME ministry, said on Wednesday.

 

“MSMEs is a nomenclature. It is not a sector. We need a differentiated approach. While we have 60 million digitally registered MSMEs, only 800,000 of these are small, and just about 70,000 are medium. There are varying levels of capability and digital maturity, exposure to debt, and technology adoption. I request the industry to focus more on the SME segment,” Das said at a Confederation of Indian Industry (CII) event in New Delhi.

 

 

The government can provide a push factor with a universal digitalisation programme — a broad enabler — but SMEs and the industry need to work on the ‘pull factor’, Das said.

 

The government is working on a digitalisation road map for SMEs, with the MSME ministry and NITI Aayog developing the plan.

 

“Strategically, the new classification scheme gives the small sector a big headroom deliberately to provide the necessary stimulus and growth space for exports, technology, and advancing towards high-tech,” Das said. In parallel, a different approach — more rooted in industry and academia and less in the government — is required for the medium sector, he added.

 

The government’s effort is to create upward mobility in technology, skilling, and business growth so that more micro enterprises can become small, transition into medium, and then grow into large companies.

 

According to officials, the Centre has been working on a plan to provide customised schemes for medium enterprises to shed their inhibitions about becoming large companies.

 

Moreover, the central government is working on a national mission to remove regulations that prevent India’s MSMEs from expanding into large companies and stifling their ambitions, NITI Aayog Chief Executive Officer (CEO) B V R Subrahmanyam said at the same event.

 

“MSMEs are most affected by regulation. Big companies can hire consultants or accounting firms for solutions, but MSMEs get crushed under the weight of regulation. The prime minister has taken a major step in deregulation — there’s a massive task force under the cabinet secretary working rapidly to ensure deregulation of land, electricity, water, and other such issues facing MSMEs,” Subrahmanyam said.

 

The Aayog, Subrahmanyam said, is also working on a programme to develop a competitive ecosystem for intermediate goods (goods used to manufacture other goods).

 

The CEO said the biggest problem facing MSMEs is the adoption of technology. To address this, Subrahmanyam launched the Digital Excellence for Growth and Enterprise, or Dx-EDGE, a platform to equip MSMEs with the tools, knowledge, and ecosystem needed to become future-ready, competitive, and resilient.

 

The platform is being spearheaded by CII, along with the NITI Frontier Tech Hub and the All India Council for Technical Education (AICTE). The Frontier Tech Hub was launched earlier this month to keep India competitive in the global technology race.

 

“If an individual entrepreneur needs to use technology to increase production, the local university will act as a mentor and upskill them… There are 60 million MSMEs — there’s no way the government or even CII can reach all of them,” the CEO said.

 

The Dx-EDGE programme will also help students in engineering and technical institutes gain real-world experience in helping companies improve their technology adoption, he added.

 

On developing a competent MSME ecosystem, citing the Japanese MSME economy, Subrahmanyam said most large Japanese companies have significant vendor development systems in place.