{"id":21460,"date":"2020-12-10T12:29:30","date_gmt":"2020-12-10T06:59:30","guid":{"rendered":"https:\/\/corpbiz.io\/learning\/?p=21460"},"modified":"2023-04-11T11:58:51","modified_gmt":"2023-04-11T06:28:51","slug":"prominent-challenges-faced-by-the-msme-in-our-country","status":"publish","type":"post","link":"https:\/\/corpbiz.io\/learning\/prominent-challenges-faced-by-the-msme-in-our-country\/","title":{"rendered":"An Outline on the Prominent Challenges faced by the MSME in Our Country"},"content":{"rendered":"\n<p class=\"has-drop-cap\">The MSME sector is one of the biggest contributors to the Indian economy. It acts as a growth accelerator and helps in overcoming the two biggest loopholes for growth i.e. poverty and unemployment. But despite being so effective, the Micro, Small, and Medium Enterprises (MSME) have their problems and challenges that act as obstacles for their growth. In this write-up, we have listed down some common challenges faced by the <a href=\"https:\/\/corpbiz.io\/msme-registration\"><strong>MSME in India<\/strong><\/a>.&nbsp;<\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_82_2 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title ez-toc-toggle\" style=\"cursor:pointer\">Page Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 eztoc-toggle-hide-by-default' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/corpbiz.io\/learning\/prominent-challenges-faced-by-the-msme-in-our-country\/#How_MSME_plays_Vital_Role_in_Contributing_to_the_GDP\" >How MSME plays Vital Role in Contributing to the GDP?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/corpbiz.io\/learning\/prominent-challenges-faced-by-the-msme-in-our-country\/#Prevalent_Challenges_faced_by_the_MSME_at_Present\" >Prevalent Challenges faced by the MSME at Present<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/corpbiz.io\/learning\/prominent-challenges-faced-by-the-msme-in-our-country\/#Prospects_in_India_to_Stimulate_the_Growth_of_MSMEs\" >Prospects in India&nbsp;to Stimulate the Growth of MSME\u2019s<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/corpbiz.io\/learning\/prominent-challenges-faced-by-the-msme-in-our-country\/#Conclusion\" >Conclusion<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"How_MSME_plays_Vital_Role_in_Contributing_to_the_GDP\"><\/span>How MSME plays Vital Role in Contributing to the GDP?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>MSME is regarded as a\nprominent contributor to the GDP of our country. It has imparted resilience to\nthe economic infrastructure by boosting the employment rate and volume of\nproduction to meet domestic as well as international demands. The MSME sector\nis dominated by micro-enterprises. At present, our country has around 6.33\ncrore MSMEs out of which 6.30 crore are working as micro-enterprises.<\/p>\n\n\n\n<p>In FY 2020, the number of registered MSMEs has increased by approx. 18.5% as compared to the preceding year. But the growth rate declined from 40% in the preceding FY that has increased from 15 lakhs MSMEs registered in 2018. Overall the number of MSMEs in the country in the past 5 years stood at 90 lakh.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Prevalent_Challenges_faced_by_the_MSME_at_Present\"><\/span>Prevalent Challenges faced by the MSME at Present<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter\"><img decoding=\"async\" width=\"1000\" height=\"536\" src=\"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/12\/Prevalent-Challenges-faced-by-MSMEs-at-Present.png\" alt=\"Challenges faced by the MSME\" class=\"wp-image-21466\" srcset=\"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/12\/Prevalent-Challenges-faced-by-MSMEs-at-Present.png 1000w, https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/12\/Prevalent-Challenges-faced-by-MSMEs-at-Present-300x161.png 300w, https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/12\/Prevalent-Challenges-faced-by-MSMEs-at-Present-768x412.png 768w\" sizes=\"(max-width: 1000px) 100vw, 1000px\" \/><\/figure><\/div>\n\n\n\n<p>Despite good prospects &amp;\na high growth rate, the MSMEs have been restrained by too many loopholes that\nhinder its true potential. The following section will provide explanatory\ninsight on challenges faces by the MSME.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Inadequate Access to Latest Technology<\/h3>\n\n\n\n<p>This is one of the leading\nissues encountered by MSMEs to date. Truth be told, MSMEs don\u2019t have proper\naccess to the latest information which makes them unfamiliar with the latest\ntechnological developments. Oftentimes, they lack knowledge, skills,\ntech-oriented education to execute a competent MSME. This obstacle is quite\nprevalent in the rural part of the country. It is believed that the technology\ncould be a driving force for those <\/p>\n\n\n\n<p>MSMEs who has been lacking on\naccount of quality and production volume. Technological up-gradation can\nprovide resilience and a much-needed edge which is required to counter the\nglobal competition. It is one of the primary challenges faced by the MSME at\npresent.&nbsp;<\/p>\n\n\n\n<h4 class=\"wp-block-heading\">Measures Taken: Launching an Initiative \u201cZero Defect and Zero Effect<\/h4>\n\n\n\n<p>Government has inculcated an amicable solution for this particular problem by launching an initiative \u201cZero Defect and Zero Effect\u201d (ZED) in association with ministry of MSME and Quality Council of India.\u00a0 The primary objective of this initiative is to develop an ecosystem of Zero Defect Manufacturing among the existing MSMEs.<\/p>\n\n\n\n<p>Under this initiative, ZED certification will be granted to the eligible MSMEs after in-depth assessment of their manufacturing facilities. Fortunately, the scheme is accessible to all the existing MSMEs and they can also avail fiscal assistance from the government for the same.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Unavailability of Credit<\/h3>\n\n\n\n<p>Another hindrance that limits the potential of this sector is their inability to obtain timely credit at a nominal rate of interest. According to some experts, MSMEs operating pan India lacks the convenience of obtaining easy credit from financial institutions. Now, this mitigates their urge for expansion and long-term growth. Also, the COVID 19 pandemic have had impacted MSMEs to a great deal. The outbreak has left them disturbed by eroding their existing resources.\u00a0 As a result, the majority of companies are now out of manpower adequate resources. Liquidity crunch is one the pressing challenges faced by the MSME at present. <\/p>\n\n\n\n<h4 class=\"wp-block-heading\">Measures Taken: Schemes under Aatmanirbhar Bharart Abhiyan<\/h4>\n\n\n\n<p>Fortunately, Government has addressed this problem aggressively by launching plenty of schemes under Aatmanirbhar Bharart Abhiyan.\u00a0 With majority of schemes launched as the counter mechanism against the loss incurred by the pandemic, MSMEs found them extremely helpful on account of handling the ongoing fiscal crisis.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Procurement of Raw\nMaterials<\/h3>\n\n\n\n<p>It\u2019s impossible to stimulate\nthe growth of the business in the absence of ample economic resources. It has\nbeen one of the primary issues of this sector. Due to financial constraints,\nmost of the small industries are bound to procure the low-quality raw material\nfrom the local region.&nbsp;<\/p>\n\n\n\n<h4 class=\"wp-block-heading\">Measures Taken: Launched Raw Material Assistance Scheme<\/h4>\n\n\n\n<p>Indian Government in association with National Small Industries Corporation (NSIC) has launched <strong>\u201c<\/strong>Raw Material Assistance Scheme<strong>\u201d<\/strong> to curb the aforesaid problem. Under this scheme, distressed MSMEs can avail financial credit from the designated sources for the purchase of raw material (both import and indigenous).<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Scarcity of Adequate Infrastructure Resources<\/h3>\n\n\n\n<p>The scarcity of\ninfrastructure facilities can erode the productivity and profitability of the\nmanufacturing SMEs. The availability of skilled manpower, electricity, and\nother basic resources plays a vital role in ensuring the competitiveness of\nMSMEs. The MSMEs are either operating in urban areas or rural region or\nindustrial estates suffers from this specific problem.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\">Measures Taken: Establishing Common Facility Centers (CFCs)<\/h4>\n\n\n\n<p>The Ministry of MSME has opted for collective approach for improving productivity as well as capacity building of MSEs (Micro and Small Enterprises). The Scheme aims at establishing Common Facility Centers (CFCs) for testing, raw material depot, training, and effluent treatment, etc. &nbsp;The primary objective of this scheme is to support the growth &amp; sustainability of Medium and Small enterprises by undermining key problems as improvement of technology, market access, skill &amp; quality, etc. <\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Absence of Skilled Manpower<\/h3>\n\n\n\n<p>Even though our country is\nblessed with a vast pool of human resources, the MSMEs still encounter the\nscarcity of quality manpower capable of performing the skilled-oriented task.\nAt present, MSMEs are in desperate need of hiring skilled manpower to boost the\nquality and volume of manufacturing goods.&nbsp;<\/p>\n\n\n\n<h4 class=\"wp-block-heading\">Measures taken:\nSkill Mapping<\/h4>\n\n\n\n<p>Indian Government in\ncollaboration with ministry of MSMEs has introduced an initiative namely \u201cSkill\nMapping\u201d for the identification of skilled individuals. To serve this purpose,\nthe ministry has formulated district-wise skill development requirement (also\nknown as Skill map) for 652 districts. <\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Poor Access to the\nPotential Market&nbsp;<\/h3>\n\n\n\n<p>In our country, MSMEs are\nfinding it difficult to get access to potential markets due to inadequate\ncapital and unavailability of the marketing tools. &nbsp;Therefore; it creates obstacles for MSMEs to\nsell out their offering to government-based agencies. Also, this could narrow\ntheir reach in the market and let their counterpart to take advantage.&nbsp;<\/p>\n\n\n\n<h4 class=\"wp-block-heading\">Measures taken: Marketing\nPromotion Schemes<\/h4>\n\n\n\n<p>Marketing Promotion\nSchemes has been already launched by the ministry of the MSMEs to undermine\nthis severe issue. This scheme aims to educates and promote the existing MSMEs\nby organizing awareness programs\/ Trade fair about Government e-Marketplace\nportal, and online services. <\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Prospects_in_India_to_Stimulate_the_Growth_of_MSMEs\"><\/span>Prospects in India&nbsp;to Stimulate the Growth of MSME\u2019s<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The government needs to take\nsome required measures to stimulate the growth of MSMEs. The Indian government\nis planning to create domestic manufacturing capabilities by leveraging the\nproposed public projects and procurements. The projects like Sagarmala,\nBharatmala are already in effect and aim to bridge the urban and rural divide,\nthereby ensuring the growth of the industrial sector.&nbsp;<\/p>\n\n\n\n<p>Right now, the economy\ndesperately needs a solid bonding between government industry-academia to track\ndown the evolving requirement in manufacturing to boost the industrial supply\nchains in the country.<\/p>\n\n\n\n<p>To overcome the aforesaid\nobstacles, adoption of the latest technology is one of the feasible solutions\nin the upcoming time. The Government of India has taken various steps to ensure\nthe technological development of Indian MSMEs on account of the competition level\nthat exists in the international market. Apart from this extremely important\naspect, the Government needs to address other key areas of challenges to\naccelerate growth.&nbsp;&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span>Conclusion<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>A fore said challenges faced by the <strong>MSME<\/strong><sup><a class=\"text-primary\" href=\"https:\/\/msme.gov.in\/\"><strong>[1]<\/strong><\/a><\/sup> are practically drastic and need prompt resolution. The government is trying to pave down the roadmap for this sector that overcomes all the obstacles and stimulates the growth for this sector. Recently, the Indian government has introduced a stimulus package of 3 lakh crore under which MSMEs can obtain collateral-free loans from the designated banks. However, the said schemes suffer from pressing challenges that seek prompt resolution from the government.<\/p>\n\n\n\n<p class=\"text-left\"><b>Read our article<\/b>:<mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/corpbiz.io\/learning\/msmes-under-gujarat-industrial-policy-2020\/\">MSMEs under Gujarat Industrial Policy 2020 : Strengthening the Pillars for Atmanirbhar Gujarat\n<\/a><\/mark><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The MSME sector is one of the biggest contributors to the Indian economy. It acts as a growth accelerator and helps in overcoming the two biggest loopholes for growth i.e. poverty and unemployment. But despite being so effective, the Micro, Small, and Medium Enterprises (MSME) have their problems and challenges that act as obstacles for [&hellip;]<\/p>\n","protected":false},"author":22,"featured_media":21463,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[176],"tags":[1299],"acf":{"service_id":"71"},"authorName":"Pankaj Tyagi","authorImageUrl":"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2022\/01\/MicrosoftTeams-image-42.jpg","authorDescription":"Pankaj has a diverse experience of writing research papers, blog, and articles during his college time. Earlier, he was working as a tax consultant in a financial firm, but his interest in writing drives him to pursue a career in the writing field.","postViews":18118,"readingTime":5,"_links":{"self":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/21460"}],"collection":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/users\/22"}],"replies":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/comments?post=21460"}],"version-history":[{"count":19,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/21460\/revisions"}],"predecessor-version":[{"id":54868,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/21460\/revisions\/54868"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media\/21463"}],"wp:attachment":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media?parent=21460"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/categories?post=21460"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/tags?post=21460"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}