‘Achieving Efficiencies in MSME Sector through Convergence of Schemes’ Report | Current Affairs | Vision IAS
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In Summary

  • NITI Aayog report emphasizes convergence for a coherent policy ecosystem, citing 18 overlapping MSME schemes.
  • Report suggests information convergence (e.g., PM Gati Shakti) and process convergence (e.g., merging schemes) for better outcomes.
  • Recommendations include integrating SFURTI with MSE-CDP, rationalizing skill programs, and an AI-powered digital platform.

In Summary

Released by NITI Aayog, the report provides a comprehensive understanding of how convergence can build a more coherent, responsive, and impactful policy ecosystem.

Need for Convergence of Schemes

  • Prevent duplication, inefficiencies, and limited outreach: Ministry of MSME (Micro, Small, and Medium Enterprises) currently administers 18 schemes having overlapping objectives and fragmented implementation across ministries. 
  • Better translation of resources into outcomes: Reduce confusion, and simplify access for beneficiaries. 

Two-pronged approach to Convergence as suggested by the Report

  • Information convergence: Integrating government-generated data at central and state levels to improve coordination, informed decision-making, etc. 
    • E.g., PM Gati Shakti integrates 16 Central Ministries. 
  • Process convergence: Merging similar schemes, combining common components, and fostering collaboration across ministries and states. 
    • E.g., Unified central sector scheme Vigyan Dhara under Department of Science and Technology acts as an umbrella scheme covering three broad components. 

Key recommendations to facilitate Convergence

  • Convergence of Cluster Development Schemes: Integration of Scheme of Fund for Regeneration of Traditional Industries (SFURTI) with MSE– Cluster Development Programme (MSE-CDP).
  • Convergence of Skill Development programmes: Rationalising skill initiatives into three-tier structure covering entrepreneurship and business skills, MSME technical skills, and training for rural and women artisans. 
  • Others: AI-powered centralized digital platform integrating schemes, Large flagship programmes like Prime Minister's Employment Generation Program and PM Vishwakarma to remain independent, etc. 

About MSMEs

  • Classification: Based on investment and turnover as per Micro, Small & Medium Enterprises Development (MSMED) Act, 2006. 
  • Significance: Employs around 62% of country’s workforce in terms of volume next only to agriculture; holds 45% in country’s exports and contributes 30% to GDP. 
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RELATED TERMS

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PM Vishwakarma

A scheme that provides financial assistance and skill development to traditional artisans and craftspeople, aiming to enhance their livelihood and preserve cultural heritage.

Prime Minister's Employment Generation Program (PMEGP)

A credit-linked subsidy program launched by the government to generate employment in rural and urban areas through the establishment of micro-enterprises.

MSE– Cluster Development Programme (MSE-CDP)

A program focused on the development of Micro and Small Enterprises (MSE) through a cluster-based approach, aiming to improve their competitiveness and sustainability.

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