Top 5 Announcements for MSME Sector in India 2023
The MSME sector provides employment opportunities to every stratum of the Indian economy, which harmonizes with the inclusive growth convergence of urban and rural India.
After agriculture, the MSME sector is known as the largest employer in India. With its innovative approach, the MSME sectors have shown how to drive immense growth in rural India at lower capital costs. On top of that, MSMEs are instrumental in propelling 30% of the GDP and 48% of exports.?
As a result, the industry has made significant contributions to rural industrialization due to financial and social inclusion through the awareness of digital India. Meanwhile, MSMEs have bolstered the reduction of regional disparities, leading to more equal national income and wealth distribution.
Let's dive into the top headlines about the developments in the MSME sector.
African Union Signs MOU with Indian Entity in MSME Sector
●?????India's economic acceleration has reached Africa after signing a Memorandum of Understanding (MOU) between the African Union and the Africa India Economic Foundation (AIEF).
●?????The MOU focuses on collaboration and promotion between the MSMEs, private and public sectors of African countries, and India.
●?????Aims to leverage business entities in India and Africa through skill development facilitation, technology transfer, MSMEs alliance in the private and public sectors, and investment promotion.
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MSME Competitive (LEAN) Scheme Revised in India
●?????Indian Central Government embarked on a revised version of the MSME Competitive (LEAN) scheme on March 10, 2023.
●?????The benefits of LEAN manufacturing tools are KANBAN, 5S, Poka Yoka, and visual workplace.
●?????The Center pledges to contribute 90% of the expenses to implement this program, including consulting and handholding costs.
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18% Women MSMEs registration at Udyam Portal
●?????From July 1, 2020, to March 12, 2023, the total number of women-empowered MSMEs is 27,75,390 on Udyam Registration Portal.
●?????Rs 14,247.24 crore has been allocated to women-empowered MSMEs under the Credit Guarantee Scheme (CGS).
●?????26,241 Women-empowered MSMEs have acquired margin money under Prime Minister's Employment Generation Programme (PMEGP).
Govt Data Record 6.1% Drop in Banks' Gross NPAs in MSME Loans
●?????As of December 12 in the current financial year, the gross non-performing asset (GNPA) concerning MSMEs in the scheduled commercial banks (SCBs) has dropped to 6.1%.
●?????In FY22, SCBs' GNPA ratio for MSME loans was 7.6%, compared to 7.3% in FY21 and 8.9% in FY20.
●?????While provisions are a portion of the lender's profit or income set aside for loans that may go bad in the future. On the other hand, a lowering GNPA ratio indicates that the lender's asset quality is improving.
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MSMEs Seek Extra Credit Due to Liquidity Crunch?
●?????Comparing the third quarter of fiscal 2022-23 to the equivalent quarter of FY2022, the loan disbursals to MSMEs grew by 53%.
●?????In the first three quarters of the fiscal year, MSME credit increased to Rs 1.45 lakh crore from Rs 94,815 crore, according to the most recent report by the State Level Bankers' Committee (SLBC) Gujarat.
●?????According to bankers, MSMEs have such a strong need for credit that the government has extended the reach of the Emergency Credit Line Guarantee Scheme (ECLGS) for MSMEs until March 2023.
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Final Thoughts?
The 'Atmanirbhar Bharat Abhiyan' reforms have supported the Indian economy in surviving global economic downturns following Covid-19. With our Indian government’s clarion call, the comeback of the Indian economy is inevitable. It is based on five fundamental factors: economic infrastructure, banking system, a thriving demographic, and demand.?
ViTWO ’s Virtual CFO service offering is reshaping the future of finances for MSMEs to simplify their concerns while amplifying their sustainable growth.
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