The contribution of India’s GDP by the manufacturing sector remains more or less stagnant due to lack of entrepreneurial growth and development in MSME sector. Examine (200 Words)
Refer - Business Line
Enrich the answer from other sources, if the question demands.
IAS Parliament 5 years
KEY POINTS
India’s micro, small and medium enterprises (MSME) sector, known as its engine of growth, contributes 31 per cent of its GDP, 45 per cent of exports, employs over 124 million people and creates nearly 1.3 million jobs every year.
Constraints in the MSME sector
· The absence of adequate and timely bank finance,
· High cost of credit,
· Non-availability of suitable technology,
· Over-regulation impede the growth of this sector,
· Lack of skills that meets the requirements of Industry,
· Lack of comprehensive exit policy.
Government therefore should increase the employability and productivity of MSME sector to improve its share of MSME’s in contributing to the share of India’s GDP in Manufacturing.
Government should focus on the following measures for betterment of MSMEs.
Availability, interest rates
· The RBI should consider a minimum of 200 basis point reduction in rates and enable banks to triple credit growth to MSMEs.
· To create the industries of the future, access to long term funding is crucial at competitive interest rates.
· By offering differential Cash Reserve Ratio and Statutory Liquidity Ratio for banks lending to the MSME sector, improving credit availability and taking remedial measures to enhance the effectiveness of the Credit Guarantee Scheme.
Imparting skills
· Augmenting human capital via vocational education and providing practical knowledge along with hands on experience in the desired field will meet the requirements of the Industry.
· Pradhan Mantri Kaushalya vikas yojana should be implemented effectively at all levels for this purpose.
Labour laws
· Formalization of work force by simplifying the complex procedures in labour laws.
· Wage code bill 2019 tabled in the parliament need to implemented in a timely manner.
Investing in research and development
· Improved interface between industries and universities to create an enabling environment for research.
· Identifying talents and making them as job creator rather than job keeper.
Nandadeep 5 years
Kindly review
IAS Parliament 5 years
Try to include about labour laws. Keep Writing.
K. V. A 5 years
Pls review
IAS Parliament 5 years
Try to include about labour laws. Keep Writing.
Yashwant rankawat 5 years
Please review
IAS Parliament 5 years
Good answer. Try to include about lack of skills. Keep Writing.
Sarvjeet kumar 5 years
please review
Thank you
IAS Parliament 5 years
Good answer. Keep Writing.
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