ENTREPRENEURSHIP

DEVELOPMENT
MAM- 504

Micro, Small and Medium Enterprises (MSMEs)

Topic →

SUBMITTED
TO
Submitted By →
PALAK BANSAL
PRINCE PRIYADARSHI
SHRIKANT PARMAR
ABHISHEK YADAV

DR. REETIKA
BHATT
 TOPICS

1- MSME : OBJECTIVES AND IMPORTANCE

By – PALAK BANSAL

2- ROLE OF SME IN ECONOMIC DEVELOPMENT

By – PRINCE PRIYADARSHI

3- SCHEMES, INCENTIVES, SUBSIDY FOR PROMOTION OF

MSME
By- SHRIKANT PARMAR & ABHISHEK YADAV
 What is
MSME?

 MSME stands for Micro, Small, and Medium Enterprise

that was introduced by the Government of India in
agreement with the Micro, Small & Medium Enterprises
Development (MSMED) Act, 2006. 
 It is considered the backbone of the Indian economy
that has contributed substantially to the socio-
economic development of the nation.
 MSMEs contribute a staggering 30% to the country’s GDP, and
around 45% of the manufacturing output, and approximately
48% of the country’s exports. 
 CRITERIA FOR CLASSIFICATION

Composite Criteria: Investment in Plant & Machinery/equipment and Annual Turnover

Classification Micro Small Medium

Manufacturing Investment in Plant and Investment in Plant and Investment in Plant and
Enterprises and Machinery or Equipment: Machinery or Equipment: Machinery or Equipment:
Enterprises rendering Not more than Rs.1 crore Not more than Rs.10 crore Not more than Rs.50 crore
Services and Annual Turnover ; not and Annual Turnover ; not and Annual Turnover ; not
more than Rs. 5 crore more than Rs. 50 crore more than Rs. 250 crore
 IMPORTANCE OF
MSME

 It creates large-scale employment

 Economic stability in terms of Growth and leverage
Exports
 Encourages Inclusive Growth
 Cheap Labor and minimum overhead
 Simple Management Structure for Enterprises
 The main role in the mission of “Make in India”
 Ministry of MSME:
Introduction
 The Micro; Small and Medium Enterprises
Development (MSMED) Act was notified in
2006 to address policy issues affecting MSMEs
as well as the coverage and investment ceiling
of the sector.
 On 9 May 2007, subsequent to an amendment
of the Government of India (Allocation of
Business) Rules, 1961, erestwhile Ministry of
Small Scale Industries and the Ministry of Agro
and Rural Industries were merged to form the
Ministry of Micro, Small and Medium
Enterprises (M/o MSME).
 The M/o MSME is having two Divisions :
 Small & Medium Enterprises (SME) Division
 Agro & Rural Industry (ARI) Division. 

Implementation of policies and various programmes schemes for providing

infrastructure and support services to MSME’s:
 Office of Development commissioner, NSIC, KVIC, Coir board
Organizationa Training Institutes
l Setup  National Institute for Entrepreneurship and Small Business
Development (NIESBUD), NOIDA, National Institute for Micro, Small
and Medium Enterprises (NI-MSME), Hyderabad, Indian Institute of
Entrepreneurship (lIE), Guwahati and Mahatma Gandhi Institute for
Rural Industrialization (MGIRI)

The National Board for Micro, Small and Medium Enterprises (NBMSME)
was established by the Government under the Micro, Small and Medium
Enterprises Development Act, 2006. 
Vision:
Sustainable development of globally competitive micro,
small and medium enterprises as an engine of growth
for the india economy.

Mission:
To promote e-Governance for empowering citizens,
promoting the inclusive and sustainable growth of the
Electronics, IT & ITeS industries, enhancing India’s role
in Internet Governance, adopting a multipronged
approach that includes development of human
resources, promoting R&D and innovation, enhancing
efficiency through digital services and ensuring a secure
cyber space.
 • e-Government: Providing e-infrastructure for
delivery of e-services
• e-Industry: Promotion of electronics hardware
Objectives manufacturing and IT-ITeS industry
• e-Innovation / R&D
• areas of ICT&E/Establishment of mechanism
for R&D translation
• e-Learning
• e-Security
• e-Inclusion
• Internet Governance
 • Works for the welfare of artisans and
workers
• Provides credit limit or funding
Features of support from banks
Ministry of • Supports technology up-gradation,
infrastructural development, and
MSME modernization
(MoMSME) • Offers assistance for improved access
to domestic and export markets
• Supports packaging, product
development, and design intervention
 • Facilitation and credit flow to
MSMEs
• Improve manufacturing base through
upgradation of technology

FUNCTIONS
• Promotion of MSMEs through cluster
bases approach

OF MOMSME
• Marketing support to MSMEs
• Skill development and
entrepreneurship development
training
• Growth and development of Khadi
and Village Industries (KVI) sector
 INTRODUCTION

 Small and medium enterprises are the backbone of

industrial development.

 It is very important for both developed and developing

country Small and medium enterprises always
represented the model of economic development, which
emphasized high contribution to domestic production,
significant export earnings, low investment
requirements, employment generation, effective
contribution to foreign exchange earning of the nation
with low import-intensive operations.

 The development of this sector came about primarily due to the

vision of our late Prime Minister Jawaharlal Nehru who sought
to develop core industry and have a supporting sector in the
form of small scale enterprises.
 ROLE OF SMES IN INDIAN ECONOMY

 In order understand the impact of SMEs on the Indian economy; one must study the trend and pattern
that have been prevalent in the preceding years. It gives us the vivid picture of what follows next.
 Following graphics help us to understand the present scenario and their contributions of MSMEs in
India.
  SMEs employ around 40% of India’s workforce, which is an estimated 80
million people, who are given an opportunity for livelihood and
employment via low-skilled jobs. Around 1.3 million SMEs contribute 45%
to India’s manufacturing output and 40% of India’s total export. In a way,
they form the backbone of the Indian economy. At 48 million, India has the
ROLE OF second largest number of SMEs in the world, edging close to China which
has around 50 million SMEs.
SMES IN THE
INDIAN  There are around 6000 products manufactured by 31.7% SMEs while the
remaining 68.2% are engaged in delivering various services. This sector, if
ECONOMY extended the right support, has the potential to spread industrial growth
throughout the country.

 Despite employing 40% of India’s workforce, SMEs are also the bane of
India’s economic problems. Though the volume numbers work in their
favor, they currently contribute to about 17% of India’s GDP.
14
MSMES SHARE BY
SECTOR
 Broadly, the SMEs help the Indian economy in the
following ways:
 Generate employment
 Reduce poverty rate
 Reduce urban-rural income gap
HOW VARIOUS  Curtail migration
SMES HELP THE  Encourage regional development
INDIAN  Boost exports
ECONOMY  Bring down pollution levels

GROW  Increase production

 Increase people’s purchasing power
 Improve quality of life in general

16
  A few of the recent initiatives by Government of India
have a given a boost to SMEs. In a direct move to
increase the GDP share of SMEs, the Government has
allocated 20,000 Cr to this sector through the Micro
Units Development Refinance Agency Bank
(MUDRA)
GOVERNMENT’S  Similarly, in a move to promote ‘Zero-Defect’
manufacturing that has ‘Zero-Effect’ on the

ROLE IN
environment, the Government has set up the
performance and credit rating system for SMEs called
the ZED rating. SMEs will be classified into bronze,

PROMOTING silver, gold, diamond and platinum categories. The

idea is to help SMEs grow bigger, gain economies of
scale and improve the quality of their products. Here

SMES are some of the other popular schemes for SMEs in

India.
 Credit Guarantee Fund Scheme: Applicable to both
existing and new enterprises, this scheme provides
collateral-free credit to Indian MSMEs. The ministry
in association with SIDBI established the trust that
facilitates a working capital loan of up to Rs. 100 17
Lakh per borrowing unit
SCHEMES,
SUBSIDY FOR
BY –
SHRIKANT PARMAR
&

PROMOTION ABHISHEK YADAV

OF MSME
CREDIT AND FINANCIAL ASSISTANCE

Prime Minister’s Employment

Generation Programme (PMEGP)

Credit Linked Capital Subsidy for

Technology Upgradation (CLCSS)

Credit Guarantee Fund Trust for Micro

and Small Enterprises (CGTMSE)

2% Interest Subvention Scheme

Rs 20,000 crore Subordinate debt for

stressed MSMEs
INFRASTRUCTURE SUPPORT

Scheme of Fund for Regeneration of Traditional Industries(SFURTI)

A Scheme for Promotion of Innovation, Rural Industry and

Entrepreneurship(ASPIRE)

Micro & Small Enterprises Cluster Development(MSE-CDP)

Technology Centres(Tool Rooms & Technology Development Centres)

Promotion of MSMEs in NER and Sikkim

PROCUREMENT AND
MARKETING SUPPORT

Procurement and Marketing Support(PMS) Scheme

Public Procurement Policy(PPP) for MSEs Order,

2012

Government e -Marketplace
TECHNOLOGY UP-GRADATION

Design Expertise to Manufacturing MSME sector

Lean Manufacturing Competitiveness Scheme (LMCS)

Digital MSME Scheme

Financial Support to MSMEs in ZED Certification Scheme

Support for Entrepreneurial and Managerial Development of MSMEs through Incubators

Building awareness on Intellectual Property Rights (IPR)

Credit Linked Subsidy for Technology upgradation

WEB SERVICES

Creation and
Harmonious
Application of
Modern Processes
Udyam
for Increasing the
Registration
Output and
National Strength
(CHAMPIONS)
Portal

MSME MSME Sampark

Samadhaan Portal Portal
SKILL DEVELOPMENT & TRAINING

• Entrepreneurship and • Technology Centres(Tool

Skill Development Rooms & Technology
Programme(ESDP) Development Centres)
ATMANIRBHAR BHARAT
RELATED ANNOUNCEMENTS IN MAY-JUNE 2020

Rs 3 lakh crores
Collateral-free
Rs 20,000 crores Automatic Loans
Subordinate Debt Global tenders to for Businesses,
for Stressed be disallowed up including
MSMEs to Rs 200 Crore MSMEs

Rs 50,000 cr. New Definition

Equity infusion of MSMEs
for MSMEs
through Fund of
Funds