QUE: To achieve rapid economic growth, there is a need to increase the share of the manufacturing sector in GDP. Discuss the current policies of the government in this regard, especially MSME (Micro, Small and Medium Enterprise).

The manufacturing sector is important for economic growth, as it contributes significantly to employment, exports, and the development of this sector can reduce our imports and achieve balance in the balance of payments. According to the latest statistics and information from the Ministry of Programme Implementation, it contributed 29.2% to GDP in the year 2021-22, and 45% to exports in the year 2021-22. In terms of employment, more than 12 crore MSMEs have been registered on the Udyom portal.

• Key initiatives of the government for the expansion of MSME and manufacturing sector:
• Make in India:

→ The aim of this scheme is to develop India as a global manufacturing hub and create an environment conducive to investment, modern innovation, skill development and entrepreneurship in the manufacturing sector in India. Under this initiative, the development of automobiles, ICT-based industries has increased in India.

• Credit Guarantee Scheme for MSME:

→ It is an initiative to promote professionalism in the MSME sector. Under it, loans are arranged for investment, other infrastructure facilities.

• National Manufacturing Policy (NMP):

→ This is a comprehensive policy that was announced in 2011 and its objective is to increase the share of the manufacturing sector in GDP by 25% in a decade and create 100 million jobs in this sector. Apart from this, it also provides incentives for the establishment of National Investment and Manufacturing Zones (NIMZ).

• Credit Linked Capital Subsidy Scheme:

This scheme is linked to the technological modernization of MSMEs. Under it, 15% capital subsidy is given by the government for the modernization of infrastructure equipment.

• Aspire Scheme:

The main objective of this scheme is to increase the production chain in rural areas. Under it, assistance is provided for innovation in agricultural products, establishment of agro-based industries, incubation centers, livelihood incubators, etc.

⇒ The Central Government has provided Rs. 50,000 crore for the MSME sector under Atmanirbhar Bharat.

⇒ The criteria for MSMEs have been changed and a new framework and new limits have been created.

⇒ A “Champion” portal has been created to implement administrative simplicity and e-governance in MSMEs.

            These policies and programs have had a positive impact on the manufacturing sector and MSMEs in India. According to the Economic Survey 2022-23, the MSME sector contributed about 30% to India’s GDP last year. It is expected that 1.25 crore new jobs will be created in this sector in the next five years.