Page 26 - Banking Finance April 2025

ARTICLE

help mitigate climate change and promote a circular tives to encourage MSMEs to adopt new technologies
economy. and innovate.
Simplifying regulations: The government needs to
By 2047, India aims to achieve sustainable development,
balancing economic growth with environmental protection. streamline regulations and reduce bureaucratic hurdles
to make it easier for MSMEs to start and operate their
MSMEs, with their focus on sustainability, will be crucial in businesses.
realizing this vision. Bridging skill gaps: The government and industry need
to invest in skill development programs to equip work-
Challenges faced by MSMEs ers with the skills needed by MSMEs.
Despite their immense potential, MSMEs face several chal-
lenges that hinder their growth and contribution to 'Vikshit Assistance provided to MSMEs by GOI
Bharat'. These include: toward making a 'Vikshit Bharat 2047'
Access to finance: MSMEs often struggle to access ad-
The roadmap for Viksit Bharat in relation to the MSME
equate credit and capital, which limits their ability to sector is multifaceted, involving financial support, regu-
invest in new technologies, expand their operations, latory reforms, infrastructure development, digitaliza-
and compete in the global market.
tion, and a focus on quality and innovation. The
Infrastructure constraints: Inadequate infrastructure, government's budgetary and policy measures are de-
such as power, transportation, and communication net- signed to empower MSMEs to grow and compete on a
works, can hamper the efficiency and productivity of global scale, thereby contributing to the overarching goal
MSMEs. of transforming India into a developed nation by 2047.
Technological gaps: Many MSMEs lack the technical The "Atmanirbhar Bharat Abhiyan" was introduced in
expertise and resources to adopt new technologies and May, 2020 to revive the MSME sector with financial sup-
innovate, which puts them at a disadvantage in the port mechanisms such as collateral-free loans and funds
global market. for capacity augmentation. The long-term vision for
Regulatory hurdles: Complex and cumbersome regu- MSMEs includes competitiveness, sustainability, and
lations can create barriers for MSMEs, making it diffi- innovation, with a focus on credit support, skilling, in-
cult for them to start and operate their businesses. frastructure, and market access.
Skill gaps: MSMEs often face a shortage of skilled work- The government is promoting digital mobility for auto-
ers, which limits their ability to adopt new technologies motive MSMEs, which is expected to drive the industry
and compete in the global market. forward and contribute to the creation of a developed
Bharat. The PM Gatishakti National Master Plan aims
To overcome these challenges and unlock the full potential to enhance multi-modal connectivity & logistics aimed
of MSMEs, the government, industry, and other stakehold- at benefiting MSMEs through improved infrastructure
ers need to work together to create a supportive ecosys- in a cost-efficient but with world- class standards.
tem. This includes: Schemes like the PM Mudra Yojana, PM Vishwakarma
Improving access to finance: The government and fi- Yojana, and the MSME Credit Guarantee Scheme have
nancial institutions need to develop innovative financ- been instrumental in providing affordable loans and
ing solutions that cater to the specific needs of MSMEs, working capital to MSMEs. The government has also
such as collateral-free loans, venture capital, and been proactive in removing barriers to MSME develop-
crowdfunding platforms. ment by revising its definition and eliminating over
Developing infrastructure: The government needs to 40,000 compliances.
invest in developing robust infrastructure, including MSMEs are encouraged to enhance their quality and
power, transportation, and communication networks,
durability to meet global standards, with the govern-
to support the growth of MSMEs. ment supporting small-scale industries and fostering
Promoting technology adoption: The government and innovation in emerging sectors like Electric Vehicles (EVs)
industry need to provide training, resources, and incen- etc, which have a very high global demand. Production

24 | 2025 | APRIL | BANKING FINANCE