The recent declaration by the G20 nations during India’s presidency has ignited discussions among experts, urging the government to bolster the Micro, Small, and Medium Enterprises (MSME) sector. This call to action stems from the belief that simplifying regulatory processes and improving access to affordable capital can unlock the immense potential of this sector, both for employment generation and fostering sustainable economic growth.
The G20’s New Delhi Declaration, adopted earlier this month, prominently recognizes the pivotal role played by startups and MSMEs as natural engines of economic growth. These enterprises are seen as catalysts for socio-economic transformation, driving innovation and job creation. The declaration specifically acknowledges the establishment of the Start-up 20 Engagement Group during India’s G20 Presidency, emphasizing its continued importance.
Puneet Kaura, Chairman of CII Delhi State Council and MD and CEO of Samtel Avionics Limited, underscored the global significance of the MSME sector and praised the G20 for its recognition of the need for financial and non-financial support from governments. Kaura highlighted that this acknowledgment by the G20 resonated positively with the MSME community.
However, it’s crucial that these promises translate into concrete actions rather than remaining mere words on paper. The MSME sector holds the potential to create high-quality employment opportunities across India and contribute to the country’s exports, which have been facing challenges due to global issues.
Bhagyashree Bhansali, CEO of The Disposal Company (TDC), stressed the need for the government to streamline regulatory processes, facilitate access to affordable capital, encourage industry-academia collaborations for innovation, and offer targeted skill development programs. Building robust incubation and mentorship ecosystems can also nurture entrepreneurship and innovation within India.
Furthermore, Bhansali emphasized the pivotal role of startups and MSMEs in driving digital technology adoption and sustainable growth. These enterprises contribute to AI innovation, enhancing efficiency, and reducing environmental impact. Their tech-driven solutions promote sustainable business practices, aligning technology with environmental stewardship for India’s socio-economic advancement.
The G20 Declaration recognizes the challenges faced by MSMEs, particularly in developing countries, regarding access to information. It welcomes the Jaipur Call for Action, which aims to enhance MSMEs’ access to information and integrate them into international trade.
Deepak Bhardwaj, co-founder of IoTechWorld Avigation, highlighted that MSMEs form the backbone of organized and unorganized sectors, providing employment to millions. One of their primary challenges is securing timely and adequate financing. While various schemes, including CGTMSE, exist, differing policies among banks often hinder access to finance. Bhardwaj proposed establishing clear and uniform criteria for financing schemes, promoting technology sharing to meet global standards, and offering special export incentives to boost MSME exports.
Ayush Lohia, CEO of Lohia Auto Industries (LAI), emphasized the crucial role played by startups and MSMEs in driving innovation and sustainability in the electric vehicle sector. Their agility allows them to adopt cutting-edge technologies and develop eco-friendly solutions. Promoting growth in this sector necessitates simplified regulations, increased financing accessibility, and skill development support.
Sanjay Sharma, MD and CEO of Aye Finance, stressed the indispensable role of startups and MSMEs in India’s economy. They have the potential to impact key macro indicators like GDP, employment, and exports while fostering entrepreneurship, reducing gender disparities, and promoting inclusive participation in society. Sharma highlighted the importance of digitization, which has become essential for businesses. Affordable smartphones, low-cost mobile data, and high-speed networks have facilitated digital adoption among MSMEs, offering various benefits such as improved customer engagement and access to wider markets.
Sharma also noted that effective digital literacy programs could encourage a broader section of MSMEs to digitize their operations, leading to enhanced business performance.
The New Delhi Declaration also endorsed the G20 2023 Financial Inclusion Action Plan (FIAP), a forward-looking roadmap aimed at accelerating financial inclusion for individuals and MSMEs, particularly vulnerable and underserved groups.
In light of these developments, it is evident that the MSME sector holds immense potential for India’s economic growth, and the commitments made by the G20 nations should translate into tangible actions that empower and uplift this crucial sector. According to recent data from the Reserve Bank, substantial credit flows to both micro and small industries highlight the sector’s importance in India’s economic landscape.