SYLLABUS

GS-3: Indian Economy and issues relating to Planning, Mobilization of Resources, Growth, Development and Employment.

Context: The report, launched in New Delhi by NITI Aayog Member Arvind Virmani and NITI Aayog CEO B V R Subrahmanyam, outlines a strategic roadmap to strengthen the effectiveness of government support for the country’s Micro, Small and Medium Enterprises (MSMEs).

More on the News:  

• The event was also attended by Secretary of the Ministry of Micro, Small and Medium Enterprises (MSME), S C L Das. Speaking on the occasion, Mr Das said that the Ministry will take this agenda forward and called the initiative of NITI Aayog helpful for the MSME sector and the government.

Key Highlights of the Report

• Issues in MSME Administration: Ministry of MSME currently administers 18 schemes across areas such as credit, skill development, marketing, innovation, technology upgradation and infrastructure. While these initiatives have contributed significantly to MSME growth, overlapping objectives and fragmented implementation across ministries often lead to duplication, inefficiencies and limited outreach.
• Key Recommendations
  • Scheme Rationalisation: Effective convergence of schemes can simplify access for beneficiaries, reduce confusion, and ensure better translation of public resources into tangible outcomes.
    • Two-pronged convergence strategy:
      • Information convergence, which focuses on integrating government-generated data at central and state levels to improve coordination, enable informed decision-making and strengthen governance.
      • Process convergence, aimed at aligning and unifying schemes to reduce redundancies, streamline operations and improve service delivery through merging similar schemes, combining common components and fostering collaboration across ministries and states.
  • Digital Inclusion: creation of an AI-powered centralized digital portal for MSMEs, integrating information on schemes, compliance requirements, finance and market intelligence. Drawing on global best practices, the proposed platform would offer real-time support through AI chatbots, dashboards and mobile access.
  • Cluster development: Converging cluster development initiatives by integrating the Scheme of Fund for Regeneration of Traditional Industries (SFURTI) with the Micro and Small Enterprises–Cluster Development Programme (MSE-CDP), while creating a dedicated sub-scheme for traditional industries.
  • Rationalising skill development programmes: a three-tier structure covering entrepreneurship and business skills, MSME technical skills, and training for rural and women artisans.
  • Marketing Assistance Wing: Establish a dedicated Marketing Assistance Wing with domestic and international components to support MSME participation in trade fairs, exhibitions and buyer-seller meets.
  • Scheme Integration: Integrate the ASPIRE scheme into MSME Innovative as a special category for agro-rural enterprises, while ensuring continued funding support.
    • The ASPIRE (Action for Support to Promotion of Industry, Rural and Enterprises) scheme is aimed at providing skill development, entrepreneurship promotion, and incubation support for small businesses, especially in rural areas.
  • Safeguard Regional and Flagship Initiatives:
    • Targeted initiatives such as the National SC/ST Hub and schemes for MSMEs in the North Eastern Region should be safeguarded.
    • Large flagship programmes like PMEGP (Prime Minister’s Employment Generation Programme) and PM Vishwakarma should remain independent due to their scale and distinct objectives.

Significance of the Report

• The report evaluates existing government schemes and programmes for the MSME sector and assesses the current level of convergence among them.
• It presents a detailed blueprint to enhance the effectiveness of MSME schemes by strengthening inter-ministerial coordination, simplifying implementation, and improving the delivery of financial, skill, marketing and innovation-related support.
• The recommendations are aimed at unlocking greater efficiency, improving outreach and empowering MSMEs, which are a key driver of employment and economic growth in India.