The Micro, Small, and Medium-Sized Enterprises (MSME) sector is arguably the most vibrant and varied in the nation. India is home to approximately 65 million MSMEs, which combined create close to 120 million job opportunities and support the GDP and export of the nation. It should come as no surprise that there are more MSME growth obstacles. Now than there were previously, especially in light of the pandemic’s setback.
Even while the MSME sector is currently recovering, thanks in large part to considerable government subsidies and MSME loan programmes. The industry as a whole still confronts a number of additional difficulties.
In this piece, we examine three typical MSME problems and how to overcome them.
MSME industry issues in 2022
India’s MSME industry was among those most severely impacted by the epidemic. Lack of money, resources, trained labour, technology adoption, and compliance were all difficulties that MSMEs were unable to handle. As a result, several MSMEs were regrettably forced to close.
The government aggressively responded by bringing in a number of perks, subsidies, and funding options. It assisted them in overcoming some of their immediate problems and carrying on with business as usual. To be prepared for the future, however, long-term solutions and a robust ecosystem of support are now needed.
Opportunities for MSME finance and availability of operating cash
Access to operating money is a reoccurring problem for MSME businesses that need to maintain their daily operations. Customer payments are late, sales and income decline, resources are not used to their full potential, ad hoc expenses may arise, etc., thus firms are constantly in need of cash reserves to cover operating costs.
Today, the government has launched a number of MSME loans to give these businesses access to capital when needed, but MSME registration certificate is required to avail benefits from government schemes. You can apply for MSME registration from MeraProfit. There are programmes like the PM MUDRA Yojana (PMMY) and the Emergency Credit Line Guarantee Scheme (ECLGS), for instance.
To properly handle working capital difficulties, a thorough plan is necessary. Think about the following:
Obstacles to adoption and knowledge of technology
The inability to recognise and use digital solutions and technology in business is a significant issue for MSMEs.
Most MSMEs in India, particularly those in rural regions, are unaware of new technologies. How they help them increase productivity, maintain compliance, scale production, evaluate output quality, and optimise processes. There are frequently insufficient qualified resources available to impart information and keep up with technological advances. Naturally, in a universe that would ordinarily move quickly, this has resulted in glacial growth.
Growth in MSMEs has been delayed as a result of this, weak infrastructure, particularly, and basic support like internet connection, PCs and laptops, and a constant supply of electricity.
It is necessary to establish a structure that promotes simplicity.
To facilitate ease of doing business, a framework must be established. Technology adoption in MSMEs will be sparked by initial investments in IT resources, infrastructure, and competencies. Examples comprise:
- An inventory management software would be helpful for effective inventory tracking and warehouse management. Businesses would be able to handle inventory, stocking, and warehousing difficulties effectively, save time and money, and even keep consumers satisfied, although this would require early expenditures and resource training.
- An e-Invoicing programme would be necessary to maintain business GST e-Invoice compliance. (applicable for enterprises with annual revenues of at least 10 crores). This would need yearly software subscriptions, personnel training, and connection with current ERP/accounting systems. Businesses would benefit from reduced data mistakes and mismatches, time savings, and ease of reconciliation (ITC claims).
Additionally, the pandemic made many organisations cease investing in R&D and innovation, which led to decreased growth prospects.
In this regard, it is advised that Indian MSMEs make use of the several possibilities that are now available:
- Attend online technology webinars to hear professional lectures on their cellphones.
- Join social media or a B2B platform to establish an online presence, develop a digital profile, follow news and articles about a certain sector, and speed up growth.
- learn new skills through online courses in cutting-edge technology.
- Consult professionals on technology adoption and digital tools online.
MSMEs must undergo digital transformation for commercial reasons. Although the industry faces reoccurring problems, there are also answers.
Lack of knowledge about current market circumstances and tendencies
Both large and small businesses must keep up with changing consumer demands and expectations as well as market trends, rivals, local and international surroundings, and financial conditions.
The MSME sector is entrepreneurial and innovation-driven. But the lack of understanding and access to information to keep Indian MSMEs competitive and connected with shifting global ecosystems has hampered their growth.
For instance, the majority of MSMEs are reluctant to participate in government bidding opportunities because they view the procedure as time-consuming and difficult. Similar to this, many MSMEs face difficulties managing their supply chains and logistics. It is failing to use external logistics partners to keep these issues under control. Others are also prevented from expanding their businesses online to reach a larger audience due to a lack of technical understanding.
Indian MSME expansion: A step forward
There is little question about the MSME sector’s development potential and contribution to India. There is also no dispute about the plethora of difficulties the industry encounters. Which impedes their development and frequently demotivates and discourages their original ardour. If you also want get maximum benefits from government then you should apply for Msme registration from Meraprofit and enjoy beneficial programmes and schemes.
The government’s actions have significantly lessened the challenges, but since knowledge and access to information remain major obstacles. It will be some time before the industry is able to recover and perform to its full capacity.
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