Niti Aayog's Proposal for Enhancing MSMEs Competitiveness
Niti Aayog, in collaboration with the Institute for Competitiveness (IFC), has issued a report outlining systemic reforms to bolster the competitiveness of micro, small, and medium enterprises (MSMEs) in India. Key focus areas include financing, skilling, innovation, and market access.
Financing Reforms
- Credit Access: Despite improved access to loans, the sector still faces a significant credit gap.
- Reforms Suggested:
- Reform the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) by enhancing regulatory oversight and reducing risk premiums for borrowers.
- Sidbi should play a crucial role in aiding NBFCs to improve their capacity and governance structures.
- Lower eligibility barriers for state-level schemes offering subsidies for capital and interest on loans.
MSME Exports
Total exports for MSMEs reached ₹12.39 lakh crore in 2024-25, with 173,350 export units reported.
Addressing the 'Missing Middle' Problem
- Call for a comprehensive policy framework to help enterprises grow organically and harness economies of scale.
- Streamlining income tax procedures to help MSMEs become formal enterprises.
Skilling and Education
MSMEs in India require substantial investment in STEM (Science, Technology, Engineering, and Mathematics) education.
- Training programs should align with current industry needs and provide last-mile connectivity, especially for micro-enterprises in rural areas.
- Address the skills gap through reforming vocational education and technical training.
