MSME Day: Government Initiatives and Support Programmes for MSMEs in 2024
24 June, 2024
Synopsis
MSME Day, designated by the United Nations, is celebrated on 27th June.
MSME Day celebrates contributions made by MSMEs in the development of the nation.
The Government of India has launched several schemes to support MSMEs.
Per the United Nations (UN), Micro, Small and Medium Enterprises (MSMEs) account for 90% of businesses, 60-70% of employment and 50% of GDP worldwide. In a developing country like India, MSMEs significantly contribute to the country’s socio-economic development. To recognise the importance of these MSMEs and celebrate their contributions to economic growth and job creation, the United Nations General Assembly designated 27th June as International MSME Day. In India, the Ministry of MSME will be celebrating ‘Udyami Bharat – MSME Day’ on 27th June.
Key Government Initiatives for MSMEs in 2024
This MSME Day in India, let’s look at some of the recent initiatives by the government for MSMEs:
Financing
Over the years, the government has rolled out multiple schemes for financial assistance for MSMEs. MSEs can apply for collateral-free loans of up to ₹50 lakh under the Credit Guarantee Fund Trust. The PM Vishwakarma Scheme enables artisans and craftspeople to build enterprises by offering collateral-free loans of up to ₹3 lakh.
Employment Generation Assistance
The Prime Minister’s Employment Generation Programme (PMEGP) scheme provides financial assistance to set up self-employment ventures. It also aims to generate employment opportunities for rural and unemployed youth and traditional artisans. This can facilitate substantial employment generation in rural and urban areas and potentially halt occupational migration.Skill Development and Training
To ensure that MSMEs are equipped with the right talent, the government provides skill development initiatives. These include Skill Upgradation & Mahila Coir Yojana, National Skill Certification & Monetary Reward, Pradhan Mantri Kaushal Vikas Yojana and Industrial Training Institutes (ITIs) offering Craftsmen Training, to name a few. Tool Room & Technical institutions help develop the relevant sectors of industries, like foundry and forging, electronics, sports goods, footwear, etc.Technological Advancements and Sustainability
The MSME Champion Schemes encourages MSMEs to manufacture goods with zero defects and ensure goods have zero effect on the environment. This can be achieved through technological upgrades and sustainable practices. The government provides ‘zero defect zero effect’ (ZED) certifications which can help MSMEs avail of various incentives.Tax Benefits
The government offers various Direct Tax and Indirect Tax benefits to MSMEs. Domestic companies with a turnover of up to ₹400 crore are eligible for concessional tax rates. Under section 115BA of the Income Tax Act, 1961, businesses are eligible for a 25% tax rate instead of 30%. MSMEs can also opt for presumptive tax benefits under section 44AD.Marketing Support
Via the Procurement and Marketing Support (PMS) scheme, MSMEs can access initiatives like organisation and participation in national and international trade fairs, exhibitions, expos, etc., held across the country. It also helps create awareness about the importance of packaging in marketing, the latest packaging technology, trade policies, MSME Conclave, developments in international and national trade and more.SEZ Incentives
Special Economic Zones (SEZ) are special territories that offer incentives to businesses operating from these locations. SEZ units can enjoy 100% income tax exemption under section 10AA of the I-T Act for the first five years (1st to 5th year), 50% export profits entitled for deduction for the next five years (6th to 10th year and 50% of the export profits for the next five years (11th to 15th year). Businesses are also exempt from central sales tax, service tax and state sales tax.Crisis Support
The government offers various insurance schemes to protect MSMEs. For instance, the Exporter Credit Insurance provides a one-year insurance policy for small and medium exporters with 90% coverage and a loss limit of ₹10 lakh. The Janshree Bima Yojana for Khadi Artisans provides life insurance cover to the artisans. The Distressed Asset Fund – Subordinate Debt Scheme for MSMEs to extend support to businesses with Non-Performing Assets (NPA).
Grow Your Business With HDFC Bank
At HDFC Bank, we offer a wide range of financial solutions for MSMEs to help them grow their business. Our Current Accounts help you transact conveniently. You can avail of Working Capital Loans to fuel a multitude of business expenses. You can get access to fund and non-fund based facilities like Cash Credit, Overdraft, Term Loans, Letters of Credit or Bank Guarantees. You can also get Business Credit Cards to manage expenses while also enjoying attractive rewards. Get started here.
FAQs
What are MSMEs?
MSMEs stand for Micro, Small and Medium Enterprises. In a micro enterprise, the investment in plant and machinery or equipment does not exceed ₹1 crore and the turnover does not exceed ₹5 crore. In a small enterprise, the investment in plant and machinery or equipment does not exceed ₹10 crore and the turnover does not exceed ₹50 crore. In a medium enterprise, the investment in plant and machinery or equipment does not exceed ₹50 crore and the turnover does not exceed ₹250 crore.
Who proposed MSME Day?
The United Nations General Assembly designated MSME Day on 27th June.
When is MSME Day celebrated?
MSME is celebrated on 27th June.
How can MSMEs apply for government support programmes?
MSMEs can apply for government-backed MSME schemes via public and private sector banks, regional rural banks, National Small Industries Corporation, Ministry of MSME, etc. You can check the application process for each scheme on the Ministry of MSME website.
Why is MSME Day important?
MSMEs contribute significantly to the development of the country in multiple ways. MSME Day recognises and celebrates these contributions.
*Disclaimer: HDFC Bank recognises the challenges entrepreneurs face while acquiring capital. Thus, HDFC Bank has created MyBusiness, a one-stop solution that gives you easy access to loans, digital solutions and provides you with the essential knowledge you need to run your business. With HDFC Bank MyBusiness, you can scale up, expand your operations, and nurture your business.
