5 major announcements made by Nitin Gadkari since taking office as MSME Minister

After BJP veteran Nitin Gadkari became the MSME Minister, he announced that he would work with full strength to increase job opportunities in the sector.

He said:

“This [MSME] portfolio is associated with the most important issue — the country's growth rate and employment potential. And it is the PM's expectation that employment should increase from this sector, which is very low now, and there should be creation of employment."

Over the years, Gadkari announced a series of measures for MSMEs to help galvanise the sector. And in the wake of the COVID-19 pandemic, he pushed for the creation of an Aatmanirbhar Bharat by pushing for clearing MSME dues, import substitution, and more.

Here are some of Gadkari's major announcements since he became the Union Minister for MSME:

Increase GDP contribution from MSMEs

Prior to 2021, Gadkari frequently said his mission is to raise the contribution of the MSME sector to the country's GDP to 50 percent from 29 percent, and ensure that it gives employment to at least 15 crore people against the 11.1 crore at present.

However, after assessing the economic impact and slowdown from the COVID-19 pandemic, Gadkari revised it to 40 percent of GDP.

In the last two years, the MSME Ministry has been focussing on increasing the number of MSMEs in India on a sustainable basis through various schemes and programmes.

Gadkari claims that the Ministry has been providing better credit facility, technology upgradation, and skilling to boost the entire MSME ecosystem in India. 

He also said that there is an urgent need to encourage research and innovation in the sector, collaborate with global entities to bring in the latest technology and best practices, and also promote marketing.

Ecommerce portal for MSMEs

Since 2019, Nitin Gadkari has been talking about starting an ecommerce portal for MSMEs and the Khadi industry - one that is inspired by Alibaba Groupfrom China and Amazonfrom the US.

It was set to be launched in 2019, but it is still in the works. The State Bank of India (SBI) is reportedly working with the Ministry to execute the project.

 The government portal is meant for selling products manufactured by small industries. Citing an example, he said that through this portal, even a beekeeper can sell their product to any part of the world.

Gadkari also expressed confidence that it will generate a turnover of Rs 10 lakh crore in two years after its launch.

“It will provide a good opportunity to the MSME sector, which contributes significantly in job generation and promoting growth of the country,” Gadkari said.

"For this portal, we have also talked to GeM (Government e-Marketplace) and I have also discussed with Piyush Goyal (Commerce and Industry Minister)," Gadkari added.

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Import-substitute policies and products

The Minister has publicly said that the MSME sector offers huge potential and the government is ready to come out with special policies to promote import-substitute products.

In this context, Gadkari said:

"One of the most important things is that we have to raise the employment potential and it is my priority, both in rural and urban areas.”

 "There are a lot of products in MSMEs. My suggestion is to identify import-substitute products and then, we can make special policies. This will reduce imports," he said.

This is in keeping with his announcement that the MSME Ministry will work alongside the Ministry of Commerce and Industry in looking at the possibility for MSMEs to locally manufacture goods which are currently being imported by India.

In June 2020, he said India should "no longer depend on China", and instead focus on research and innovation to ramp up domestic manufacturing.

No ban on entry of corporates in MSME sector

In June 2019, the Minister announced that the ban on entry of corporates and private players in the MSME sector has been lifted to pave way for the formation of 700 clusters in order to reduce dependence on imports as well as for job creation.

He also urged Indian industries to join hands in bringing innovative ways of financing, adding that there was no "trust deficit" between industry and the government, which has been constantly doing away with "red-tapism".

Additionally, the MSME Ministry is setting up enterprise facilitation centres across the country to make MSMEs more competitive and help them integrate with big enterprises.

These centres are to be set up at block levels, and will help disseminate information to micro and small enterprises and detect issues faced by them.

Clearance of MSME dues

In a move to strengthen the MSME sector and the 'Aatmanirbhar Bharat' initiative, the Indian government is looking at bringing in a law ensuring MSME dues are paid within 45 days, Nitin Gadkari, Union Minister of MSME, said in January 2021.

MSME receivables are one of the major challenges faced by small business owners. These delayed payments lead to a working capital lockdown, which, in turn, creates a lot of mismanagement of resources, money, and operations despite the capital flow.

Addressing the All India Association of Industries, the Minister said:

"All MSME receivables should be paid within 45 days. Delayed payment is a major problem faced by MSMEs. We are thinking to bring a law to protect their interests." 

The Minister added that the Indian government is making a proposal to introduce legislation mandating public sector undertakings (PSUs) to settle the dues of MSMEs within 45 days of sale.