The Micro Small and Medium Enterprise (MSME) has been the driving source of the Indian Economy for over the last few decades now and plays a significant role in uplifting the small and medium scale business in India. It acts as a catalyst for transforming the socio-economic sector of the country: the sector focuses on important aspects like reducing poverty, employment generation, and dissuading rural-urban migration. MSME aims at building an entrepreneurial eco-system that not only help in exhibiting consistent growth of the economy but also focuses on flourishing the Indian economy by promoting indigenous technologies.
How MSME’s objectives play an important role in the economic growth of India?
The task of building a nation is underway, and MSME is emphasizing on some of the fundamental factors that can help the country in gaining more stability in economic growth. In this context, some of the major constraints that are taken into consideration include the line of credit, finance for working capital and initial capital, qualified production staff, and manufacturing technology for better production of goods.
To foster an entrepreneurial culture and to provide an economical solution for the country, MSME is focusing on attaining the following objectives that are given below:
Employment Generation
The first and foremost objective of MSME is to create jobs and to turn the unemployed sector into a productive workforce. This will not only help in the creation of equal distribution of wealth but also help the country in full utilization of its workforce. To make this objective possible MSME loan is being offered to small and medium scale entrepreneurs so that through this type of industries, more job can be created.
Improving Export Sector
The production of better quality goods and services can increase the export of goods and products to foreign countries. Export of a country plays a crucial role as it helps the country in earning foreign currencies which also improves its overall economy. One of the reasons for which MSME loans are provided is that the small and medium scale industry can contribute to the improvement of the export sector.
Reduces Poverty
Poverty is a big problem in our country, and MSME’s objective is to reduce poverty by flourishing the state with new technology, providing MSME loan to the small scale and medium scale industry.
Reduces Economic Inequality in the country
The GDP of the country does not always show it’s actual economic state. A larger disparity in economic distribution can lead to an ineffective workforce. To maintain the balance, MSME offers loan to the small and medium scale entrepreneurs so that it not only helps in the creation of jobs but also reduces the economic disparity in the country.
Potential Interventions that can expand the objective of the MSME
MSME is playing its role in developing the financial infrastructure of the country. But apart from that, several potential interventions can help MSME in achieving its objective in the following way:
- Effective approach from liquidity management in improving the debt-access and other facilities for the non-banking finance companies.
- Enabling infrastructure by encouraging securitization of trade receivables.
- Develop better risk management that can analyze the financing patterns of different sectors.
Also Read: MSME Loan From Most Popular Lenders
To Conclude
The Micro, Small and Medium Enterprises has become an emerging sector which has shown a dynamic and vibrant approach over the last few decades. It not only plays a significant role in the industrialization of the backward areas but also helps the country flourish in its overall aspect.