How has the government’s initiatives affected SMEs

26th of May 2014 was a day that is imprinted in every Indian’s mind as it was a day when most of us were on cloud nine having high expectations for a bright future of our country. Experts and economists had forecasted world changing reforms and huge boost in our economy; but has Modi government done enough? Is the outcome of the reforms and new polices at par with our expectations? These questions need answers. The new policies and reforms have benefited the SMEs and MSMEs, but for certain sectors the expected growth was not observed. The government has greatly boosted manufacturing units and revised tax policies for Micro, Small and Medium Enterprises (MSMEs).

One of such noticeable policies is ‘Make in India Policy’ which has the following objectives:

• The policy is expected to create 100 million jobs in the manufacturing sector by 2022.
• It is aimed at increasing the growth rate in the manufacturing sector up to 12-14% per annum
• It ensures sustainable growth with regard to the environment
• It aims to increase the share of manufacturing sector from 16 to 25% by 2022

Other remarkable initiatives include the Micro Units Development Refinance Agency (MUDRA) bank that offers credit guarantee schemes against the loans offered to the micro businesses, hence promoting micro and small businesses. It also provides three types of loans to the micro as well as small enterprises which include:

• Shishu (up to Rs. 50,000)
• Kishor (above 50 thousand and up to Rs. 5 lakh)
• Tarun( Above 5 lakh and up to 10 lakh)

Further, our Finance minister, Arun Jaitely has:

• said that the government would allocate Rs. 20,000 to escalate SMEs
• allocated a huge sum of Rs. 10,000 to encourage entrepreneurship that will help to attract private investors thus bringing hope to SMEs
• also taken care of the start up companies by allocating a fund of Rs. 1000 crore for their growth.

Similarly, the investment caps for MSMEs has also been increased under MSMED act, 2006. These reforms and policies have encouraged the people of India to think optimistically about the coming time, that was also reflected in a survey conducted by Forbes in which about 55% of the respondent believed that appropriate steps have been taken by the Indian government for the ease of doing business. In short, the steps taken in the SMEs sector can bring positive results in the future and be a vital part of India’s mission to become a developed nation.