The Economic Times, December 18, 2023
Experts are of opinion that there is a need to harness data through the digital public infrastructure to build creditworthiness and inclusion of small and micro businesses in India which can help them to access easy finance. This view emerged at an event organised by CUTS International (leading public policy body) and Institute for Industrial Development (ISID) on “Fostering MSMEs and Jobs: Policy Lessons from Experiences of Select Sectors and Clusters”,organised in New Delhi last week.
While speaking on the issue of enabling innovative finance for MSMEs, Amar Patnaik highlighted the role of SIDBI, and indicated that a similar recommendation has been made by the Standing Committee on Finance. Patnaik also highlighted the need for supporting women self-help groups by way of capitalisation, market linkages and training. This could enable them scale into micro enterprises which could have positive spillovers in their districts. The speakers also discussed ways to address skill gaps among blue-collar workers of India, enhance their productivity, and examine the integration of Environment, Social and Governance (ESG) framework within the MSME sector.
Presentations were made by Satyaki Roy, ISID and Navneet Sharma, CUTS Institute for Regulation and Competition, on this issue. Gopal Krishna Agarwal, National Spokespersonon Economic Affairs, BJP, highlighted that GST data has the ability to create huge economic credibility and creditworthiness for the MSME sector. Data and technology can be leveraged to create digital public infrastructure for supporting MSMEs, facilitating credit, and enabling adoption of ESG principles by the industry.
The speakers highlighted significant potential of MSMEs not only in economic terms but also in reshaping India’s societal fabric, suggesting that studying this aspect is crucial alongside its economic impact of MSMEs.Pradeep S Mehta, Secretary General, CUTS International, highlighted the needto ease compliance burden for addressing challenges faced by MSMEs inadopting ESG practices.
Mehta highlighted the significance of value creation by prioritisinginvestments in worker welfare, a dimension often overlooked in discussionsabout ESG.In terms of skilling, Dr. Aruna Sharma, former Secretary, Government of India,and CUTS Distinguished Fellow, suggested that the skillsministry should putindividuals as apprentices inMSMEs and pay them stipends for a specifiedperiod.
This will make them employable, often in the MSME sector andbeyond as well.Nagesh Kumar, Director, ISID, indicated that MSMEs continue to confrontcritical issues like capital constraints and limited infrastructure access,rendering them vulnerable amid the post-COVID economic recovery.The speakers also highlighted specific challenges faced by womenentrepreneurs and lack of credible data around informal economy, MSMEs,challenges faced and contributions made by them.
Anil Bhardwaj, Secretary General, FISME, called out the condescendingattitude of developed countries of preaching ESG principles to developingcountries while continuing to source products from China, guilty ofsuppressing human rights and democratic voices.Ram Mohan Mishra, Chairman, Meghalaya Investment Promotion Board, andformer Secretary, Ministry of SMEs, GOI cited government initiatives toenhance competitiveness among MSMEs and highlighted that environmentalregulations should be carefully structured to avoid negative impacts onMSMEs.
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