Government-backed Initiatives and MSME progress in India

As the Indian economy stands at the threshold of a ubiquitously globalized era, domestic commerce – be it in the large cities or in the rural areas – is more important than ever to the success of Indian business and to the quality of life of the population as a whole. The welfare of micro, small and medium enterprises is doubtlessly a required step towards these goals, and consequently, the government need place sufficient emphasis on serving the needs of these enterprises. When the government takes the necessary precautions to ensure the growth of the MSME sector, noteworthy improvements in nationwide infrastructure and economic sustainability are virtually guaranteed. In contrast with large-scale conglomerates, which seek solely to optimize operations in the most profitable areas of the country (e.g., Mumbai, Delhi, Chennai, and Kolkata), MSMEs have the unparalleled capacity to bring life and spread wealth to the distant areas and generate growth for all sectors of the economy.

The objective of this study is to determine the extent to which government organizations that support MSMEs are achieving their key objectives in as efficient a manner as possible. As motivation for the project, there exists the underlying assumption that these organizations are in fact not doing all that they could do in the assistance of MSMEs. Milagrow Business and Knowledge Solutions Pvt. Ltd. is an organization dedicated to the growth of these frequently overlooked enterprises and is offering itself to partner with the government in effectively accomplishing these objectives. Milagrow advocates “Ethical, Sustainable, Profitable Growth,” which is precisely the direction in which MSMEs must head in order to contribute positively to the economy.

Maximum efficiency in promoting the growth of MSMEs is quite beneficial both to the national economy and to these enterprises themselves. In the course of this study, Milagrow bears that knowledge in mind, and seeks to assist the government in facilitating the changes necessary to reach these objectives. While it is clear that there are directives to assist MSMEs in place, it is the charge of Milagrow to ensure that these directives are implemented properly and effectively.

Highlights:

·        More than 96% acknowledge or choose to avoid giving direct answer on corruption & bribery

·        70 to 80% MSMEs still not aware of various Govt. initiatives

·        65% complain of infrastructure and 56% of raw material prices as main issues 

• Introduction 6
• General Approach 7
• The “C7” – Conceptual Septagon – Analytical Framework 8
• Overview 8
  • C1: Scope 9
  • C2: Stakeholders 9
  • C3: Mindsets 9
  • C4: Deep Dialogue 9
  • C5: Social Architecture 9
  • C6: Managing the Transformation 10
  • C7: Metrics of Success 10
• Focus Areas of Questioning 11
• Overview 11
• Business-centric Background Questions 11
• Government-Related Questions 11
• Personal Opinion Questions 12
• MSME-DO 12
• Credit Linked Capital Subsidy Scheme 13
• ISO-9000 Certification Reimbursement Scheme 13
• Specialized Training Programmes 13
• Entrepreneurship Development Institutes 13
• National Small Industries Commission (NSIC) 13
• National Commission for Enterprises in the Unorganised Sector (NCEUS) 13
• Apex Industry Bodies 14
• Word Associations 15
• SME Ratings / Industrial Associations / Apex Bodies 15
• Final Specifics for Reference 15
• The Data 16
• Overview 16

Exhibits:

• Exhibit 1: Locales 16
• Exhibit 2: Company Sizes (self-defined) 18
• Exhibit 3: Business Sectors 19
• Exhibit 4: Business Sector by Govt. Satisfaction 20
• Exhibit 5: Turnover vs. Positive/Negative Perception: Statistical Regression 22
• Exhibit 6: Business Sector by Turnover 24
• Exhibit 7: Common Denominators 26
• Exhibit 8: Perceived Impact of Government 27
• Exhibit 9: Size vs. Impact: Mosaic & Contingency 28
• Exhibit 10: Government Schemes, Average Effectiveness Ratings 30
• Exhibit 11: Awareness of Initiatives 31
• Exhibit 12: Bribery & Corruption 32
• Exhibit 13: Word Associations – Government Perception 33
• Exhibit 14: Negative vs. Positive Frequencies: One-way Analysis 34
• Exhibit 15: Multi-regression Model – Turnover & Size vs. Gov’t Perception 36
• Exhibit 16: Size vs. Satisfaction – Oneway Analysis 38

• Qualitative Observations and Notes 40
• Overview 40
• Responses to “Failures and Factors of Failure” Questions 40
• Government Interaction; Schemes Benefitted From 41
• Suggestions for Change 41
• Revisiting the C7 Framework – Conclusions 43
• Overview 43
• Framework Analysis 43

• Recommendations 45
• On Infrastructure 45
• On Corruption 45
• On Taxation 45
• On Loans and Financing 46
• On Rising Materials Costs 46
• On Labor Laws 46
• On Social Architecture 46
• Final Statement: 47

• Appendix 48
• MSME Study Questionnaire, Final Version 48

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