The approach of Indian leadership and GDP growth is moving in a positive direction. On 16th March at a function at Lady Sri Ram College in Delhi, International Monetary Fund’s managing director Christine Lagarde has lauded the Narendra Modi government’s ‘Make in India’ campaign and called the country a “bright spot” on a cloudy global horizon, saying India has the potential to double the size of its economy by 2019 compared to 2009. She also said that “India’s GDP will exceed that of Japan and Germany combined. Indian output will also exceed the combined output of the three next largest emerging market economies – Russia, Brazil and Indonesia…This year already, India’s growth rate is expected to exceed that of China”.
Prime Minister Narendra Modi has often mentioned that India enjoys a 3D advantage of democracy, demography and demand in the global economy. Would like to quote here the statement of Mr. Anil Ambani (published in The Hindu) “When I once met Prime Minister Narendra Modi, I was struck by a telling comment he made during our conversation. He said, “Anil, do you know that even the tears we shed in this country are not our own? Every tear gas shell used by our security agencies is actually imported! The Prime Minister’s anguish was entirely genuine and for me, an eye-opener, literally.”
Encouraging micro, small, and medium enterprises (MSMEs) to grow, organize themselves and take on global competition it is critical for India to leverage its favorable demographic profile and realize it’s widely hailed growth potential. To understand in detail click here…
MSMEs are the veritable backbone of the country’s economy, providing gainful employment to nearly 80 million people. Manufacturing MSMEs account for 45 per cent of the country’s manufacturing output and have consistently grown at a rate above that of the overall industrial sector. Export-oriented MSMEs, on the other hand, account for around 40% of total exports.
In 2014, the government had announced a corpus of Rs. 10,000 crore for MSME startups and this year Finance minister Arun Jaitley has announced that government will allocate Rs 20,000 crore through Mudra Bank for the SME sector and will enhance credit facility to boost the growth of small businesses and manufacturing units. He also allocated Rs 1000 cr for support of Start-ups. The Government’s ‘Make in India’ initiative and its thrust on expanding the share of manufacturing to India’s gross domestic product (GDP) has the potential to transform the fortunes of the micro, small and medium enterprises (MSMEs) in the country. Also with focus on Digital India and Swachh Bharat Abhiyan, the sector will get the needed impetus.
The government has already made a good beginning in prioritising ease of doing business indicators and addressing bottlenecks such as administrative procedures and clearances. Industrial Entrepreneurs Memorandum and industrial licensing systems are online 24×7 while labour inspections and self-certifications have been eased for medium and small enterprises.
The nation’s technology startups recognize the potential for big gains in the small business sector, young technology firms are working to establish an advance payment model with SME customers to ensure on-time payment. Software product think-tank iSPIRT, for example, sees the potential in the market and is currently innovating SaaS products to change SMEs’ buying and paying behaviors. India’s SME market is worth about $370 million, Tech startups like iSPIRT, as well as main players like SAP, Microsoft and Intuit are all focusing on India’s small business sector. Technology firms are working on pre-authorized payments from SME bank accounts and are developing in-house sales teams to work with small businesses and develop a relationship.
Experts from the UK and other European nations are interested in introducing green and lean initiatives in Indian small and medium-sized enterprises. As part of a Rs 5.5 crore project funded by Kolkata’s Jadavpur University and UK’s Aston University, international experts in operations management are sharing best practices in the supply and value chain. The idea is to improve small and medium-sized enterprises (SMEs) performance by implementing a green supply chain management model which is based on sustainability. This will reduce wastes and costs, improve performance with minimal or no damage to the environment. The way technology startups in India are taking interest in SME sector is a good sign for future growth of country.
To see an Alphabetical listing of emerging SMEs in India click here…