Why in the news? 

Union Minister for MSMEs Jitan Ram Manjhi outlined six strategic pillars identified to foster the growth of the MSME sector.

What are the 6 pillars for the growth of the MSME Sector   

• Formalisation and Access to Credit: Promoting formalization of MSMEs to enhance their credibility and access to formal financial institutions.Improving access to credit through schemes like Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE).
• Increased Access to Market and E-commerce Adoption: Facilitating MSMEs’ access to domestic and international markets through initiatives like market linkages and export promotion schemes.
• Higher Productivity Through Modern Technology: Encouraging MSMEs to adopt modern technologies and digital tools to improve productivity and efficiency.
• Enhanced Skill Levels and Digitalisation in the Service Sector: Focusing on skill development and training programs to enhance the capabilities of the MSME workforce.
• Support to Khadi, Village, and Coir Industry for Globalisation: Promoting traditional industries like Khadi and Coir by providing marketing support and international exposure.
• Empowerment of Women and Artisans Through Enterprise Creation: Encouraging entrepreneurship among women and artisans through skill development and financial support.

How can Employment be raised?   

• Promoting MSME Growth: Support MSMEs with policies for credit access, market expansion, tech modernization, and encourage startups for job creation.
• Skill Development and Training: Invest in industry-aligned skill development, collaborating with educational institutions and industry partners for vocational training.
• Infrastructure Development: Invest in infrastructure projects for job creation; develop industrial clusters and economic zones for manufacturing jobs.
• Supporting Employment-intensive Sectors: Promote high-employment sectors like tourism, agriculture, healthcare, renewable energy; prioritize job creation in rural areas.

Indian Government steps taken for MSME 

• Prime Minister Employment Generation Programme (PMEGP): It aims to create employment opportunities through the setting up of new micro-enterprises.
• Credit Guarantee Scheme for Micro & Small Enterprises (CGTMSE): Provides collateral-free loans of up to ₹1 crore to individual Micro and Small Enterprises (MSEs).
• Financial Support to MSMEs in ZED Certification Scheme: Provides up to 80% subsidy to MSMEs to inculcate Zero Defect and Zero Effect (ZED) practices in manufacturing.
• A Scheme for Promoting Innovation, Rural Industry & Entrepreneurship (ASPIRE): Facilitates innovative business solutions, promotes entrepreneurship, and creates new jobs at the grassroots level.

Way to Green Transition and R&D (Way forward)

• Financial Incentives and Soft Funds: Offer MSMEs financial incentives, subsidies, and soft loans for green tech and support R&D with grants and tax incentives.
• Policy Support and Regulatory Framework: Develop supportive policies and regulatory frameworks that encourage MSMEs to integrate environmental sustainability into their operations.
• Capacity Building and Technical Assistance: Offer capacity-building programs and technical assistance to MSMEs to enhance their knowledge and capabilities in green technologies.
• Promotion of Green Products and Market Access:Promote green products via marketing campaigns, certification programs, and platforms for showcasing and selling.

Mains PYQ: 

Q Economic growth in the recent past has been led by an increase in labour productivity.” Explain this statement. Suggest the growth pattern that will lead to the creation of more jobs without compromising labour productivity. (UPSC IAS/2022)

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