The declaration of G20 nations under India's presidency should spur the government to give a big push to the MSME sector by simplifying the regulatory process and enhancing their access to affordable capital, say experts.
The commitments made in the G20's New Delhi declaration with regard to the MSMEs ought to be followed by the member nations as the sector has the potential to generate employment and promote sustained growth.
The New Delhi Declaration adopted early this month said the G20 recognise that startups and Micro, Small and Medium Enterprises (MSMEs) are natural engines of growth. They are key to socio-economic transformation by driving innovation and creating employment.
"We welcome the establishment of the Start-up 20 Engagement Group during India's G20 Presidency and its continuation," it said.
Chairman of CII Delhi State Council and MD and CEO of Samtel Avionics Limited Puneet Kaura said the MSME is considered important the world over and the G20 declaration has once again underlined the need for extending financial and non-financial support by the governments to this sector.
"It was heartening for the MSME to have received the due recognition by the G20 under India's presidency. These promises, however, should not remain on paper but must result in action on the ground as the sector has immense potential to generate quality employment across the country and contribute to the country's exports which have been suffering on account of global problems," he said.
Bhagyashree Bhansali, CEO of The Disposal Company (TDC), said that to further promote startups/MSMEs, the government should simplify regulatory processes, enhance access to affordable capital, foster industry-academia collaborations for innovation, and provide targeted skill development programmes. Creating robust incubation and mentorship ecosystems will also nurture entrepreneurship and innovation in India.
"Startup/MSMEs are at the forefront of promoting digital technology and sustainable growth. They drive innovation in AI adoption, enhancing efficiency and reducing environmental footprints. By creating tech-driven solutions, they enable businesses to operate sustainably, fostering a future where technology and environmental stewardship go hand in hand, advancing India's socio-economic transformation," she said.
The G20 Declaration said it recognises challenges MSMEs, particularly in developing countries, face with respect to access to information and thus, welcomes Jaipur Call for Action for enhancing MSMEs' access to information to promote the integration of MSMEs into international trade.
Deepak Bhardwaj, co-founder, IoTechWorld Avigation, said MSMEs are the backbone of organised as well as unorganised sectors and provide employment to millions of people.
"Major challenge every MSME faces is to get right amount of finance at the right time. Although various schemes and majorly CGTMSE is operating but every bank exercise different policies which create hurdle to get the finance. Along with scheme, clear and crisp criteria for financing should be formed part of financing schemes so that every bank can exercise uniform criteria as well eligible MSMEs can get right amount finance," he said.
He also said technology sharing with MSME to prepare them up to global standards and special export incentives may push MSME exports.
Ayush Lohia, CEO of Lohia Auto Industries (LAI), said that in the electric vehicle sector, startups and MSMEs are the driving force behind innovation and sustainability. Their agility and adaptability enable them to lead the charge in adopting cutting-edge technologies and developing eco-friendly solutions.
"Promoting growth in the electric vehicle sector requires governments to simplify regulations, provide access to financing, and foster skill development. Startups and MSMEs in this space play a pivotal role in reducing unemployment and accelerating the transition to sustainable transportation," he said.
Sanjay Sharma, MD and CEO of Aye Finance, stressed that startups and MSMEs are indispensable to India's economy and are regarded as the engines of socio-economic transformation. They have the potential to influence macro indicators like GDP, employment, and exports along with nurturing entrepreneurship, reducing gender disparities, and enabling inclusive participation in society.
"Digitisation is no longer a choice and has become an essential ingredient of every business. Affordable smartphones, low-cost mobile data, and easy accessibility to high-speed networks have been catalysts in improving the digital adoption of MSMEs, providing a vast canvas of opportunities for them - better customer engagement, access to wider markets of suppliers and buyers, and efficient business management," he said.
Digital literacy programmes, if effectively administered, can ensure that a wider section of MSMEs make the shift to digitizing their operations, which will lead to improved top and bottom lines, Sharma added.
The New Delhi Declaration endorsed the G20 2023 Financial Inclusion Action Plan (FIAP), which provides an action-oriented and forward-looking roadmap for rapidly accelerating the financial inclusion of individuals and MSMEs, particularly vulnerable and underserved groups in the G20 countries and beyond.
According to the latest Reserve Bank data on 'Deployment of Gross Bank Credit by Major Sectors', the outstanding at end-July 2023 was Rs 6.13 lakh crore to 'micro and small' industries, and Rs 2.54 lakh crore to 'medium' enterprises.