In a developing country like India, MSME industries are the backbone of the economy. The MSME sector contributes to 45% of India’s Total Industrial Employment, 50% of India’s Total Exports and 95% of all industrial units of the country and more than 6000 types of products are manufactured in these industries. There is immense opportunity in enabling MSME sector to grow a lot more and to generate additional employment opportunities and contribute more to GDP. According to government figures in 2019, it employed more than 110 million people and accounted for 31.8 per cent share in national Gross Value Added (GVA). However, due to resource limitations, these enterprises are typically very fragile, with high-risk liability, which makes them vulnerable even to the smallest tremors of instability in the business ecosystem. The only way to counter these threats is to develop a risk-resilient organisation, by leveraging ERM, to safeguard against economic instability, natural disasters, and cyber risks. Enterprise Risk Management (ERM) should be a mandatory process for MSMEs, in order to improve their chances of sustained and successful longevity.
The Ministry of MSME implements various schemes and programmes for growth and development of MSME Sector in the country.Recently, Post Covid-19, Government has taken a number of initiatives under Aatma Nirbhar Bharat Abhiyan to support the MSME Sector in the country. An online portal “Champions” has been launched by the Prime Minister to cover the aspects of e-governance including grievance redressal and handholding of MSMEs. RBI has also announced several measures to “Reduce Financial Stress of MSMEs”. One such measure is that the Micro, small and medium Enterprises (MSMEs) are exempted from paying the minimum 1% Goods and Services Tax (GST) liabilities in cash if their annual turnover is less than Rs.6 crore.
MSMEs are now being run by younger, more tech savvy entrepreneurs who have more access to information which gives them more access to funding, equipment and know-how. The Indian MSMEs have started opting for sustainable solutions which would help them in the long run. The MSMEs also have a huge potential for exports. The village and traditional industries like handloom, handicrafts, leather, pottery, Ayurveda and yoga, etc. have immense potential to export their products to the global market. Amidst the crisis, the government is trying to provide an extra push to MSMEs to ramp up exports of consumer goods which can reap the advantages of comparative advantage that can be available in the post pandemic scenario.