From access to finance to ease of doing business, hear from industry experts on the the revival of MSMEs
The Micro, Small and Medium Enterprises (MSMEs) sector is among the worst-hit from the COVID-19 pandemic. Several factors, including a precipitous dip in demand, the drying up of credit and liquidity, among others, have contributed to the precarious condition faced by the sector that employs 40 percent of India’s non-farm workforce.
To survive this crisis, 70 percent of India’s MSMEs have cut back on their workforce. Estimates suggest that 20-40 percent of MSMEs could permanently close down in the current scenario.
There is an urgent need to bring together prominent stakeholders across governments, industry bodies, corporations, social enterprises to have a concrete action plan that will help the sector power through the current scenario and enable its transformation as a powerhouse of the economy.
The MSME Transformation “Dynamic India” Convening, hosted by the Global Alliance for Mass Entrepreneurship (GAME), is an effort in that direction. The day-long virtual event, which is supported by Facebook and powered by YourStory, will take place on July 15, 2020
Over a series of panels, some of the most influential leaders from the ecosystem will share their perspectives for the crucial sector to survive, revive, thrive, and sustain amidst the on-going pandemic. Here are some of the key takeaways attendees can expect from this unique convening.
A multi-prong strategy to help the survival and long-term growth of MSMEs
To give focus and direction to the efforts to revive MSMEs, an ‘MSME Transformation Task Force’ was constituted by Ravi Venkatesan, Founder of the Global Alliance for Mass Entrepreneurship (GAME) and chaired by Dr. K. P. Krishnan, Former Secretary, Ministry of Skill Development and Entrepreneurship, Government of India.
The introductory session will mention the highlights from a report released by the task force titled ‘Improving Economic Dynamism and Accelerating MSME Growth’. It will provide short-term fiscal relief measures to survive, and medium-to-long-term structural reforms to revive the sector and help them thrive. It will also outline a pragmatic and specific action plan to tackle issues such as liquidity, credit access, ease of doing business, and compliance concerns that have crippled the sector.
Securing strong lines of credit and liquidity — the lifeline of MSMEs
Access to a regular supply of credit is essential to the functioning of MSMEs. Driven by the COVID-19 lockdown, 57 percent of MSMEs have no cash reserves, while 65 percent have had to dip into their personal savings to manage operations.
To ensure that sectors and enterprises with strong fundamentals get access liquidity to keep their businesses alive, the first panel will discuss strategies and interventions, including enabling strong communication and execution of announced packages through state governments and local industry bodies, credit guarantee arrangements with banks and funds allocation to new-to-credit MSMEs, among other interventions, will be discussed at length.
Ease of Doing Business- A catalyst for revival
MSMEs are two to three times likely to grow their potential when operating as a formalised entity. And while India has made significant progress on the global Ease of Doing Business rankings in the past few years, high compliance burdens and costs, and complex processes remain a bottleneck for formalisation growth, productivity and innovation in the MSME sector.
A panel will deliberate on solutions such as streamlining of multiple compliances by rationalisation, digitisation to increase uptick of compliance and de-linking non-compliance from imprisonment, among other measures to catalyse the formalisation of the sector.
A roadmap for MSMEs to grab export opportunities
Given the rise in cost of doing business in countries like China, India now has the chance to position itself as an economical and safer ideal destination for companies to diversify their business in the long run. In this session, speakers will deliberate upon the proactive policies like setting up land hubs or SEZs with associated physical and digital infrastructure, upskilling labour and technology needs and streamlining access to skilled labour, that can help in making India a global exporter.
Bringing mass entrepreneurship to the fore as a way of life
Even today, many youths continue to covet private and coveted public sector jobs as a way of life instead of becoming an entrepreneur. This is because entrepreneurship is associated with tech unicorns and billionaires rather than millions of job-creating MSMEs, a perception that discourages 'mass entrepreneurship’.
The final panel of the convening will deliberate on suggestions to foster an entrepreneurship culture in the country, which include making an entrepreneurship curriculum compulsory in schools, Industrial Training Institutes (ITIs) and colleges, promoting tinkering labs, entrepreneurship cells and incubators in every school and college, and providing support to showcase success stories and tolerance to failure through targeted ‘growth events and celebrations’ which demonstrate the journey of small businesses.