India’s 63 million micro, small and medium enterprises (MSMEs) contribute significantly to the country’s GDP (29 per cent) and exports (44 per cent) and are crucial to India’s journey towards a developed country. However, these businesses have been facing a continuous crisis since demonetisation in 2016.
The Covid-19 pandemic and subsequent geopolitical upheavals such as the Russia-Ukraine war, the Israel-Hamas conflict and the Red Sea crisis have hit these businesses with a slew of disruptions such as closures, supply chain disruptions, increased logistics costs and high raw material price fluctuations. As a result, many MSMEs have suffered losses due to spoilage of their inventory and loss of sales.
Anil Bhardwaj, secretary general of the Federation of Indian MSMEs, says, “In today’s global environment, government institutions must take steps to address the impact of global developments on small businesses.” Therefore, it is important for Manjhi’s ministry to prepare a large-scale plan to revive India’s MSME sector from crisis.
What needs to be done
Timely Payment , Late payments due to the lax attitude of the government and private enterprises are a curse for this sector, which is making it more difficult to raise capital and expand business. Reforms should be focused on increasing the speed of arbitration.
support system – A dedicated crisis response mechanism should be set up to provide immediate support during times of distress. This could include emergency grants, quick export approvals, logistical support and consular assistance.
to the east – Current policies are too focused on the West. With Asia’s share of global GDP estimated to reach 60 per cent, it is important to direct trade promotion efforts towards this region.
Restructuring – Liberal restructuring options should be given to MSMEs affected by pandemic and war. Currently, if an MSME that has borrowed Rs 5 crore is unable to pay its installment on time, it is marginalized, which affects their access to financial services
On whose head does the responsibility lie?
Jitan Ram Manjhi, 79 7 HAM(S) Minister for Micro, Small and Medium Enterprises
Former Chief Minister is the oldest minister in Modi 3.0 – Manjhi served as the Chief Minister of Bihar for nine months in 2014-15. Manjhi, the founder of Hindustani Awam Morcha (Secular), was elected from his birthplace Gaya.
Dalit hero – Manjhi, who has always been an advocate of the Dalit community, was born in 1944 to agricultural labourer parents and studied at Magadh University. He has been associated with several political parties, including the Congress (1980-90), Janata Dal (1990-96), Rashtriya Janata Dal (1996-2005) and Janata Dal (U) (2005-15).
state Minister
Shobha Karandlaje, 57 years: BJP
Three-time MP – The BJP leader, the first woman MP from Bengaluru North, has been elected to the Lok Sabha for the third consecutive time (earlier from Udupi Chikmagalur). She served as Minister of State for Agriculture and Farmers Welfare and Food Processing Industries in Modi 2.0.