The government of prime minister Narendra Modi has reached out to the MSME sector and provided valuable reforms to aid its progress. Finance minister Nirmala Sitharaman orchestrated the reforms in May last year stating, “A collateral-free automatic loan for MSMEs is being provided, this will give facility up to $40 billion. There are no guarantee fees; no fresh collaterals required so I guess this will benefit 4.5 million units (businesses) so that they can resume their business activity and also safeguard jobs. Essentially this is to spur growth and to build a very self-reliant India.”
The investment limit for micro industries has been raised five times to $140,000 and a turnover of $700,000; for small industries, the investment limit has gone up by a similar ratio to $1.4 million and a turnover of $7 million; and for medium industries, the investment limit has been increased by a similar proportion to $7 million and a turnover of $33 million. Services sector which had lower thresholds, have been brought at par with manufacturing companies and this enabled access to finance, technology, marketing support and productivity which, in turn, influenced profitability.
The authorities have recognised the value of the MSME. They have also shown intent in aiding its growth and this is the true measure of the current worth of these businesses as they strive to drive the country’s fortunes forward.