The Indian government’s initiative for ‘Atmanirbhar Bharat’ or self-reliance has been undertaken in response to the sentiment rising in various countries to shift their business out of China and into India. As the Indian government calls upon the nation to buy products locally made by Indian companies, manufacturers are expected to gain an edge through this endeavour and sales will increase significantly in the coming years. With continued government support, India is expected to emerge as the manufacturing hub, taking over China, in the foreseeable future. To make India self-sufficient and a global manufacturing hub, infrastructural growth is the key.
Covid-19 and the subsequent nationwide lockdown dealt a severe blow to the country’s economy. In a bid to restore it to normalcy, PM Narendra Modi announced an incentive package to the tune of ₹20 lakh crore as a part of the Atma Nirbhar Bharat Abhiyan.
Tenets of Atma Nirbhar Bharat
There will be five major foundations on which a self-reliant India is expected to be based: economy, infrastructure, system, demography, and demand. Made robust by all the five facets, the Micro, Small and Medium Enterprise (MSME) sector can play a critical role in achieving the long-term vision of Atmanirbhar India.
A major step to be taken by the government towards building world-class stellar infrastructural facilities is the National Infrastructure Pipeline (NIP) in which investments expected to be made are over INR 100 lakh crore. Also, the rural infrastructure needs to be upgraded as 65 per cent of India’s population resides in rural areas.
Another aspect that is expected to accelerate India’s growth is innovation in the manufacturing industry. The uncertainty created by the global pandemic and the allocation of relief package for a self-reliant India presents numerous opportunities for creative disruptions across verticals. The objective is to boost domestic manufacturing by being ‘Vocal for Local’ and ultimately taking Local to Global. For instance, the import of incense sticks (agarbatties) has now been banned to push agarbatti and bamboo industries in India. Similarly, restrictions have been placed on the import of rubber tyres and colour TV by the Directorate General of Foreign Trade (DGFT) to encourage indigenous production and make India self-sufficient in these sectors.
Significance of MSMEs
MSME is the second-largest employment provider in the nation. Currently, there are around 56 million such enterprises across several industries, employing about 124 million people. Owing to this reason, the MSME sector is known as the growth engine of the nation. Making MSMEs robust would have multiple impetuses that will boost the economy and employment.
Keeping in mind the integral place that the MSMEs occupy within the Indian economy, even the Prime Minister has underlined how this segment will act as the bedrock for economic development. Thus, to get the MSME sector back on track, the Indian government announced it to be within the ambit of the Atma-Nirbhar Bharat Abhiyan (ANBA).
MSMEs – Engines of Economic Growth
To strengthen MSMEs there are three critical aspects that need to be taken care of: availability of skilled labour in MSME clusters, ensuring financial stability through adequate funding and enhancing the market competitiveness of their products to achieve both – import substitution and exports.
MSMEs will benefit from a number of measures such as easy access to loans and de-risking the segment with a credit guarantee so that banks are at comfort. Emphasizing tech-driven systems in administrative reforms, education and health coupled with privatisation of public sector units, except in the strategic field, is expected to bring in the efficacy required, and releasing more resources than allocated.
The Indian MSMEs have catered to the domestic market either via selling directly to the consumers (B2C) or as a part of the value chain steered by organised private players (B2B). Elements like rising competition and evolving consumption patterns have led to the necessity of integrating customers’ opinions and voice in product design so that MSMEs can stay relevant. Therefore, it is imperative for MSMEs to create, manufacture and sell those products, which the customers have a demand for. They need to be connected to the prevailing environment, where the business model, strategy and processes are attuned to the ever-changing market dynamics employing a customer-oriented approach.
Summing Up
Steps taken in true spirits can massively benefit the MSMEs and their progress would translate into the progress of the whole economy. A successful and robust manufacturing industry will spell economic success and development for India in the coming times, thus fulfilling the larger goal envisioned by Atma Nirbhar Bharat Abhiyan.