CURRENT AFFAIRS
CURRENT AFFAIRS
Description
NITI Aayog, in collaboration with the Institute for Competitiveness, has released a comprehensive report titled ‘Enhancing MSMEs Competitiveness in India’. The document highlights key policy interventions and structural reforms needed to unleash the full potential of India’s Micro, Small, and Medium Enterprises (MSMEs). It focuses on crucial areas such as finance, skill development, innovation, and market access.
Key Sectors In Focus
The report closely examines challenges and growth avenues in four major MSME-driven industries:
Textiles and Apparel
Chemical Products
Automotive Components
Food Processing
Each of these sectors is assessed for unique constraints and possible policy-driven enablers.
Highlights Of Report
Financial Inclusion and Credit Gaps
Between 2020 and 2024, formal credit access increased for:
Micro & Small Enterprises: from 14% to 20%
Medium Enterprises: from 4% to 9%
However, only 19% of the total MSME credit demand was fulfilled in FY21, indicating a massive credit gap of nearly Rupees 80 lakh crore.
While the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) has been scaled up, the report suggests overhauling it for better efficiency. Improved institutional coordination and focused outreach are essential for bridging the financing shortfall.
Skill Gaps and Workforce Productivity
A substantial portion of the MSME workforce lacks access to formal technical or vocational training.
This deficit severely impacts both productivity and the potential to scale operations efficiently.
Barriers to Innovation and Technology Use
Minimal R&D investment and a sluggish pace of technology adoption hinder competitiveness.
Key obstacles include: Intermittent electricity supply, Weak internet infrastructure, High costs of digital upgrades
Additionally, state-sponsored tech-support schemes are underutilized due to low awareness and limited accessibility.
Policy Recommendations
The report advocates for:
A cluster-oriented and flexible policy framework tailored to regional contexts.
Enhanced real-time data integration, monitoring systems, and collaboration with key stakeholders.
Support for digital literacy, especially in marketing, along with logistics partnerships to improve supply chain efficiency.
Geographic Focus: Northeast And Eastern India
Targeted interventions are recommended for high-potential regions, especially in northeastern and eastern parts of India, where MSMEs can be empowered through direct market access platforms and ecosystem strengthening.
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