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Role of SMEs in making India Atmanirbhar

role-of-sme-in-making-india-aatmanirbhar
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“Atmanirbhar” is a Hindi term which means self-reliant or self-sufficient. Atmanirbhar Bharat is a policy introduced by our honourable Prime Minister, Mr Narendra Modi, in May 2020. When the COVID-19 was engulfing the nations world-wide, and crumbling the economies like playing cards, “Atmanirbhar Bharat” was launched as a ray of hope. This policy provides a platform for the budding and existing Small Medium Enterprises or SMEs to grow and flourish. According to the MSME Act 2006, an enterprise with an investment limit between 25 lakhs to 5 crores is recognized as a Small Enterprise and that having an investment limit between 5 crores to 10 crores is recognized as a Medium Enterprise.

Contributing to more than 17% of the GDP, SMEs are propelling Indian economy with vigour and gusto. Last decade has witnessed a spectacular increase in the number of SMEs, which have grown up to approximately around 48 million. With SMEs providing employment to around 40% of India’s working class, the public sector acting as the only source of employment has become a thing of the past now. SMEs are capable of minimizing unemployment without much engagement from the government, which makes them operationally more reliable. SMEs contribute around 45% of domestic industrial output and 40% of total exports, thereby helping to increase the manufactured and export products. With appropriate support systems, SMEs can match the potential to serve as the manufacturing units for large scale industries, enabling the large scale industries to reduce their dependence on foreign manufacturers.

Setting up large scale industries demands a humongous amount of raw materials and well-established infrastructure, which restricts them to particular regions of geography. SMEs are not bound by geographies and generally need minimal raw materials and average to below-average expertise to set up, which makes SMEs’ establishment a comparatively convenient affair. Atmanirbhar Bharat policy provides various financial support for the SMEs, that helps SMEs to avail capital investment without much difficulty. This further encourages SMEs to set up their footing even in remote locations within a very less time. With more and more SMEs springing up in rural locations, the opportunities for employment in remote places are also beginning to shoot up.  This can help to reduce the poverty rate and curb migration. SMEs such as solar energy generators are environment-friendly ventures. With proper guidance and instructions, SMEs can help in reducing environmental pollution to a large extent. Especially in these times of pandemic, SMEs can become effective elixirs for multiple woes of Indian economy.

The Government of India has launched various policies and schemes that provide SMEs with the platform to initiate and expand. A government venture named “Indian Opportunities Venture” in partnership with SIDBI has been set up allocating around 50 billion INR to the micro, small and medium-sized enterprises. The Government of India is following a “cluster-based approach” to enhance the capability, productivity and competency of the SMEs. Around 20 items have been reserved solely for the SMEs to manufacture, providing them room to proliferate. SMEs are further encouraged by various accelerators, incubators and investors. They are wholeheartedly coming forward to hold their hands and become the guiding lighthouse of the SMEs, to help the SMEs through the initial course of growth.

The percolating mobile and internet network is further enabling the SMEs to spread their business both in rural and international markets. Currently, around 43% of SMEs are resorting to digital marketing, for promotion and trading purposes. Various social media apps such as Facebook, WhatsApp, Instagram etc., are assisting the SMEs to reach out to their customers even in the remotest corners directly, eliminating the woes of middlemen dependency as well as geographical barriers. It is estimated that by 2022, the number of smartphone users in India will reach up to 700 million. This will undoubtedly open a wider market and create bigger opportunities for the SMEs to grow. Even the government is helping to equip SMEs with digital portals like Government E-Marketplace, which were earlier available to only big businesses. SMEs can avail big government projects by listing their products and services on these portals. With an ever-growing market and appropriate support available for their growth and development, SMEs have the potential to become a major stakeholder of the Indian economy. SMEs growth can definitely increase people’s purchasing power, decrease urban-rural income gap, encourage regional development and improve the overall quality of life in general. Thus, SMEs are competent enough to support the five pillars of Atmanirbhar Bharat which are economy, infrastructure, technology-driven systems, vibrant demography and demand, thereby making India Atmanirbhar.

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