To what extent has the government aided the MSME sector in realizing its full potential as a powerhouse of the Indian economy?

MSME sector is a powerhouse of Indian economy contributing 40% of GDP, 50% exports and providing 11% wage. Government has aided MSME sector through: 1) Easy credit through PSL norms, SECLGS extended (credit life scheme, 5/9 markup loans) 2) Charging identification formula to increase coverage of MSME under benefits via 5 lakh profit and 25 lakh turnover in norms 3) Ease of regulation through Udyog portal - single point registration However, deep-sea challenges persist: 1) Disruption in the sector - dominance of micro/small MSME whose >80% are trade-based 2) Lack of capacity utilization due to poor demand in economy via 30% capacity utilization 3) Other schemes - Respond tax cuts to 15% - Labour law reforms - GST for tax reforms - CHAMPIONS portal Hammer depth the challenges persist: 1) Disruption in the sector - dominance of micro/small MSME whose >80% are trade-based 2) Lack of capacity utilization due to poor demand in economy via 30% capacity utilization

MSME can become ethos engine of Urban Bharat by facilitating through hand holding, capacity building and expansion of easy credit for expansion

— Animesh Jain · AIR 63