MSMEs are very important in the Indian economy's growth, as the largest part of the contribution to GDP and employment happens to be constituted by them. In this regard, what the government has undertaken includes a Udyam Registration and other kinds of financial and developmental plans to enable and facilitate the MSMEs. However, the issue now is the extent to which MSMEs are using such opportunities.
This article will present a rationale for the relevance of MSME registration, the benefits of government programs open for MSMEs, and issues that make MSMEs less capable of taking the programs.
Background Information on Udyam Registration
To simplification of the process of registration of companies, the Ministry of Micro, Small, and Medium Enterprises introduced Udyam Registration. The Udyam Registration Number (URN) is unique and given to each firm registered under Udyam Registration. So, UAM is no longer available with most companies, which earlier had it along with them.
Why is Udyam Registration important?
1. Simple Access to Government Benefits: There are several subsidies and incentives under the schemes introduced by the Centre for MSMEs through this Udyam Registration.
2. Collateral-Free loans: The government facilitates credit to be available to MSMEs with schemes like the Credit Guarantee Fund Scheme for Micro and Small Enterprises, also known as CGTMSE.
3. Interest Subsidy: Interest is being subdued to registered MSMEs for loans taken under CLCSS.
4. Protection Against Delays in Payments: Deferred Payments advantage under Udyam registration, legal remedy is also available while collecting the interest amount.
5. Taking Part in Public Bids: Udyam-registered MSMEs have been given priority over public tendering and in-public purchase.
Government Programs for MSMEs :
The government has undertaken the following activities to facilitate an expansion of MSMEs, and a few of the key ones are prominent below:
1. Prime Minister's Employment Generation Programme (PMEGP): This goes hand in hand with the finance of starting a new venture, which subsidizes up to 15–35% of the project cost as a whole.
2. CGTMSE, or Credit Guarantee Fund Scheme: It extends unsecured loans to the MSMEs. The eligible credit amount is up to ₹2 crores.
3. MSE-CDP, or Cluster Development Program for Micro and Small Enterprises: Encourages the development of MSME clusters. Enhances competitiveness and productivity.
4. TUFS, or Technology Upgrading Fund Scheme: It assists the MSME technologies by up-gradation. Financial help is given in terms of machine up-gradation.
5. The ZED Certification Programme: It promotes environmental as well as quality standards in MSMEs and provides financial help so that people can become certified.
What stops MSMEs from utilizing Government schemes?
Though the government is providing support, most of the MSMEs today are not fully opting for these schemes. Let's now find out the principal causes behind this heterogeneity:
1. MSMEs are unaware of the benefits available with MSME registration and financial assistance offered by government schemes. Because of improper communication, companies cannot avail of these schemes.
2. The process is highly complicated for most business organizations since the registration process at the Udyam Registration Portal has been made simple but remains paper-based and bureaucratic.
3. Many of the MSMEs belonging to the rural sector do not have access to the e-application and online portal due to a deficiency in digital technology.
4. Even though the government provides some subsidy for income generation schemes, the entire initial expenses are borne by the small-scale enterprises.
5. Sanctioning of loans is poor and processing time for the payment of subsidy takes a long time. This directly affects the effectiveness and scale of MSMEs.
How Can the Government Schemes Be Better Used by MSME?
The above steps can be taken to reduce the gap between the existing system and its effective usage:
1. Awareness marketing: Educating MSME regarding Udyam Registration and various schemes organized through seminars and digital marketing.
2. Procedures: Reduce paperwork and better their application process. So Udyam India is here to solve your problems.
3. Digital Infrastructure: Training the MSME about how they would be registering on online platforms
4. Fast-Track Approvals: Mechanism of timebound approvals followed by timely releases of funds
5. MSME Support Centres Institutions: This entails especially establishing specific aid desks counseling entrepreneurship on application procedures for registration.
Conclusion:
Under governments, there is scope for a vast expansion of the MSME industry through programs such as Udyam Registration, however, most cannot enjoy the full benefit of such a scope because mostly budget and processing requirements along with other impediments many times. With access, process simplification, and awareness enhancement, it will enable the government to leverage MSME for better utilization of fruits of the schemes and better meaningful contributions by this sector toward the Indian economy. Register on Udyam most easily and stay well informed about every MSME scheme so contact Udyam India today.
