The core of the Indian economy is the Micro, Small, and Medium Enterprises (MSMEs). They are one of the major contributors to the economic framework of the nation. They make up for almost 30%-40% of the whole economic set up of the country.
To classify further, we can say that the Micro, Small & Medium Enterprises Development Act of 2006 specifies that MSMEs can be either manufacturing- or services-based. Micro-enterprises are defined as any company with an investment of up to Rs 1 crore and/or a revenue of up to Rs 5 crore. Small enterprises are defined as companies with an investment of up to Rs 10 crore and/or a revenue of up to Rs 50 crore. Medium-sized businesses have a maximum investment of 50 crore rupees and/or a maximum annual revenue of 250 crore rupees.
Plus, they are the growth indicators for the nation.11 crore Indians are employed by MSMEs, which contribute 29% of India’s GDP. Rebuilding MSMEs’ financial velocity in 2022 has been essential to providing a significant boost to the GDP growth rate. They enable more employment, modernization, represent the country on global level and a developing entrepreneurial approach too.
This Blog goes on to signify the trends to watch as the year 2022 ends in MSME’s:
1. Growth in Sales and Distribution
The MSME sector was devastated by the Covid-19 outbreak. It also highlighted the value of internet sales channels by demonstrating how quickly offline and manual sales may be affected. Along with production, the supply chain was also negatively impacted, leading to noticeable gaps and delays in executing a process.
To close this gap and hasten MSME-B2B e-commerce collaborations, the Indian government has allocated Rs 2.3 lakh crore for a 5G countrywide optical fibre network. The SMEs who have access to digital technology can earn 50% more money. Customers in the manufacturing industry will receive a convenient and affordable digital interface from B2B e-commerce players. Hence, this is going to be positively impactful for the Sales & Distribution.
2. Possibility of Expansion Made Even More Accessible
Many MSMEs switched from producing non-essentials to essentials during the epidemic. Due to the expensive expense of growth and increased reliance on offline channels, some were unable to.
During the recovery, the government’s Credit Linked Capital Subsidy and Technology Upgradation Scheme, which aims to promote technology in MSMEs rampantly, may shift the game. Up to two-thirds of expenses will be cut when a corporation expands digitally. This will, in turn, enable the scope of physical expansion. The money saved here can be put to use there. Why not? The expansion is becoming more and more tangible for MSME’s. And they are beginning to put it into use as progression comes up.
3. Enabling Better Interaction with the Market
Offline media have a small audience reach, unsatisfactory statistics, and little room for expansion. MSMEs may reach a larger consumer base—roughly 75% more—through B2B e-commerce. B2B e-commerce platforms will make it easier for MSMEs to penetrate far-off regions where OEM consumers have faced numerous difficulties. Also, the digitization is enabling the MSME’s to reach beyond the power and make new transformations in the whole scenario.
4. Financial Upliftment and Support to MSME’s
Due to the payment delays, the epidemic stressed MSMEs. It has taken more than a year to get things under control. Although the government’s action guaranteed payments within 45 days, the industry needs quick assistance from credit sources, which provided a significant flow of funds.
To improve their bottom line, institutional lenders balanced their balance sheets and NPAs. Data-driven B2B e-commerce platforms created substitute risk assessment models and saved them.
5. MSME’s to become more independent and Self-Driven
The MSME industry in India is heavily reliant on imports for a variety of things like raw materials, money, machinery, etc. It’s time to create self-sufficient, locally-based businesses with reliable manufacturing, a solid supply chain, cost effectiveness, and safety.
B2B e-commerce platforms work to help businesses realise their full potential and release their inner fervour. Incorporating traditional values and assuring full use of potential, it will work to create firms that are stronger, better, and more competitive both domestically and internationally.
Therefore, the 5 Trends as listed above showcase some problems that MSME’s went through. But now the solution to all such problems is being addressed. It has been a gradual process but as the New Year arrives, things are meant to take on a swing. Also, the government’s support stands of extreme importance when addressing these issues.
