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07 Feb

Government Initiative for SMEs

  • By Editorial Team


The growth and development of the small and medium-sized enterprises (SME) sector is important for a developing economy like India. To promote the business and sustainability of the SMEs, the government has taken measures to help them survive in this competitive market.

These schemes are designed to provide financial as well as technical support to the SME units to help them stay relevant in a competitive market scenario. Following are the government schemes and programs designed to support the SMEs and help them compete with the larger players in the market. 

1. Micro & Small Enterprises - Cluster Development Programme

Cluster programs are designed to bring enterprises located within an identifiable area with shared practices and producing similar or complementary products, which can be linked together and function as a unit.

As a part of a cluster, every individual unit supports each other in order to achieve a collective goal that is the growth of the group. All the enterprises of a cluster will be located within a specific radius and operate in a similar fashion using similar technologies. A cluster will also have a similar production process, similar marketing policies, face similar challenges and have similar opportunities.   

This scheme is designed bearing the following objectives in mind:

  • Providing MSMEs with technical knowledge, training, access to capital and market knowledge to promote the growth of such enterprises. It will also help the MSME units to have better access to the market to sell their products. 
  • Creating self-help groups to help the industry as a whole to increase their production capabilities and provide immediate assistance to the units in a cluster in case of an urgent requirement.
  • Create Flatted Factory Complexes and help in upgradation of facilities in the infrastructure of an MSME or a cluster.
  • Creation of Common facility centres to provide training, testing of new products, store for raw materials, and finding complementary production process to aid in the growth and advancement of the MSME unit 

2. Technology Centre Systems Program (TCSP)

Technological advancements are necessary for any industry to be able to cater to the changing needs of the consumers. The government has taken the initiative to provide access to the latest technologies and train the workers to use it to their advantage. The Ministry of Micro, Small and Medium Enterprises have built 18 technology centres to help the SME sector to be technologically sound and compete on equal footing in the current market scenario.  

These centres are given the responsibility to play a supervisory role in supporting the businesses in this sector by providing technological advice. Development of technical skills for youth coming from different educational backgrounds like school dropouts to graduate engineers is to be undertaken by these technology centres. This will help build a pool of skilled workers who can later help the SMEs to implement new technologies in their operation, increasing productivity and lowering the cost and time of production. 

This scheme is designed with the following objectives in mind:

  • Access to technologically improved manufacturing techniques
  • Provide technical training to improve availability and employment opportunities of skilled workers
  • Provide business and technical advisory services

3. National Manufacturing Competitiveness Programme (NMCP)

The Ministry of Micro, Small and Medium Enterprises launched this scheme for the MSME sector to provide them financial and promotional support to increase their sales. This scheme is focused on helping small and medium businesses to sell their products in international markets. The Ministry has proposed proactive measures to implement bar codes on all the manufactured goods to allow them to be sold outside the country. 

In one of the schemes, government has announced financial aid in terms of reimbursing 75% of the one-time registration fee for bar code implementation in the SME’s operations.

This scheme is designed bearing the following objectives in mind:

  • Provide marketing and promotional support to sell goods in the international market
  • Promote the use of bar code extensively in the SME operations
  • Provide support and financial aid for obtaining patents

4. A Scheme for Promoting Innovation, Rural Industry & Entrepreneurship (ASPIRE)

This scheme proposed by the government has the goal to build a network of technology centres and promote the advancement of new businesses in the country. The priority of this scheme is to set up 80 Technology Business Incubators (TBI) and provide financial as well as technical support for the training of incubates. 

This scheme is designed bearing the following objectives in mind:

  • Develop entrepreneurship in India
  • Develop and provide innovative business solutions
  • Promote innovation and technological advancement in the MSME sector
  • Create job opportunities to reduce unemployment

5. Trade and Industry Related Functional Support Services (TIRFSS)

The government proposed this scheme to collect statistical data related to production, labour, infrastructure, labour, marketing, raw materials and so on to help the industry in planning. This will help in the formulation of appropriate policy for the organized and systematic development of the struggling industries like the coir industry. It also promotes the implementation of e-governs system that will help the policy to be easily accessible and transparent. It will also help in the training and improvement of the human resources in all spheres. 

This scheme is designed bearing the following objectives in mind:

  • Collect and analyse statistical data to help in the better formulation of business strategies
  • Implement e-governs for easy access
  • Training and development of human resources

6. Building Awareness on Intellectual Property Rights (IPR)

To make the SME sector a competitive sector for business to flourish and give way to new and innovative business ideas, the government introduced this scheme to protect and nourish new business ideas and strategies. By properly utilising the IPR tools, the SMEs can promote technological advancements and competitiveness in the market.

This scheme is designed bearing the following objectives in mind:

  • Raise awareness among the SMEs about protecting their Intellectual Property Rights (IPR)
  • Help in safeguarding the business ideas and strategies
  • Providing financial support for training in IPR tools
  • Provide financial support in conducting workshops and seminar to spread the awareness 

The various government schemes discussed above are formulated with the view of promoting the growth and advancement of the SME sector with both financial and advisory support. Many of these schemes are directed towards making the sector independent and technologically advanced to help them thrive in the current competitive market scenario.

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