1. Analysis of Support and Outreach Initiative for MSME Sector

2. Points to be covered… Introduction to MSMEs Importance of MSMEs
Issues plaguing this sector
Important reforms undertaken
12 initiatives announced
How effective will the reforms be?

3. Introduction to MSMEs

4. Importance of MSMEs
There are about 65 million units employing about 120 mn people
MSME accounts for 8% of GDP
It accounts for 40% of the total exports
It accounts for 45% of the manufacturing output
After agriculture sector, it is the MSME which is the largest generator of employment

5. Issues Plaguing this sector
Credit availability
NPAs
GST
Access to market

6. Issues Plaguing this sector
Higher input costs
IBC
Lack of skilled labour availability

7. Some of the important reforms
CGTMSE
PPP
MUDRA
PSL
Corporate Tax
MSME amendment bill

8. Initiatives announced – Access to Credit
59 minute loan portal has been launched
2% interest subvention for all GST registered MSMEs
Companies with a turnover more than ₹ 500 crore, must now compulsorily be brought on the Trade Receivables e-Discounting System (TReDS)

9. Initiatives announced – Access to market
All public sector undertakings of the Union Government must now compulsorily be a part of GeM
The Public sector companies have been asked to compulsorily procure 25%, instead of 20% of their total purchases, from MSMEs
3% of the procurement reserved for women entrepreneurs

10. Initiatives announced – EoDB, Technology Upgradation
Random allocation for Inspections/Visits
Returns under 8 labour laws to be filed once a year
Single license under Air and Water pollution acts
Amending Companies act
Establishing pharma MSMEs
Hub and Spoke model for tool rooms

11. Evaluation of these reforms
Doesn't address the structural issues
Implementation is the key
Targeted lending is fraught with risks
Undue pressure on the banking sector?

12. Having said so These reforms will not yield the results overnight
The reforms will lead to formalization
It is a right step towards strengthening the MSME sector
Enter into bilateral and multilateral agreements to provide more market access