Faster economic growth requires increased share of the manufacturing sector in GDP, particularly of MSMEs. Comment on the present policies of the Government in this regard.

Need to focus on this sector

1. High contribution to GDP of country
2. High share in exports [≈ 40% of exports from MSME industries]
3. Big employment generator → In both urban and rural areas → To both males and females
4. Can serve to fulfill the goal of inclusive growth

Impetus to MSME sector ↓ more industries → more employment → More demand → overall growth in economy.

Challenges faced by sector

1. Lack of cheap raw materials
2. Lack of 24x7 electricity
3. Lacks easy availability of institutional credit
4. Skilling issues - as manpower is not skilled in state of art technology
5. Problem of dwarfism - as Economic survey 2019-20 pointed out ↓ No economies of scale

Measures by the Government

1. 12 point charter by Prime Minister: → 25% procurement of Government through MSMEs → 59 min loan upto 1cr → Easy liquidation procedure
2. PM Mudra Yojna - collateral free loan upto 10 crore
3. Schemes like "ASPIRE" - to promote MSME industries in rural areas and "CHAMPIONS portal" to enhance information dissemination
4. Comprehensive and inclusive definition - removing differences in goods and services based

Scope for further actions

1. Improving competitiveness of goods eg textile sector lost to Vietnam, Bangladesh
2. Concepts of infant industries and sunset clauses
3. Plugging 'infrastructure gaps'
4. Leveraging the free trade agreements to utilise export markets.