Contribution of MSMEs in the Indian Economy

In India, MSMEs are categorized into Manufacturing Enterprises and Services Enterprises (reference MSMED Act 2006). The Indian Economy is quite heavily dependent upon Micro, Small, and Medium enterprises. There are enough statistics available online to prove that the sector is the backbone of the Indian Economy. Here, we will talk about the same and more.

 What do the statistics say about the contribution of MSMEs to the Indian Economy?

·        There are about 63.4 million units spread across the geographical expanse of India.

·        The overall contribution to the GDP is 29%.

·        The contribution towards manufacturing GDP is 6.11%, about 24.63% to services GDP, and 24.63% to manufacturing output GDP.

·        The sector employs about 120 million people.

·        The overall contribution of the MSME sector to the export sector is about 45%.

·        The MSME sector in India has maintained a steady growth rate of 10% over the past few years.

It is interesting to note that almost 20% of MSMEs in modern India are rural-based, employing a considerable workforce from the country's backward areas. This percentage indicates that the rural MSMEs play a significant role in ensuring sustainability and economic independence for many village-based youths.

 

Contribution of the MSME sector to the Indian Economy

Considering that MSMEs are contributing to a great extent to the Gross Domestic Product and exports, it is a major contributor to not just the economic growth of India but also social, sustainable, and entrepreneurial growth.

 

There are three major areas of contribution of the sector:

 

1.   GDP – as per statistics above, one of the biggest roles of MSMEs today is their contribution to their Gross Domestic Product. At least one-third of India's manufacturing output comes from MSMEs, which is quite considerable. While the current contribution is 29%, the Government aims to increase it to almost 50% in the coming years. Due to this factor, Micro, Small, and Medium Enterprises in India are the Indian Economy's backbone.

2.     Employment – the current figures show that the sector offers employment to about 11 crore people at present. As per government sources, efforts and drives are increasing to about 15 crores within the next few years.

3.  Exports – in a developing economy like India, exports help drive growth. MSMEs today contribute almost half to India's total exports. No doubt, the country is heavily dependent on the MSME sector  for economic growth and sustainability.

Besides these three major contributors, the sector offers low-entry barriers for start-ups and entrepreneurial projects. The sector also has a major role to play in the sustainable growth of India.

Commendable Rohit Kakkar reviews at American Express

Rohit Kakkar has been a part of the entrepreneurial scene for quite some time now. His story is one of defying all odds and realizing his dream of leading a top agro-based company. After completing his MBA from the Maharishi Institute of Management, Ohio, Rohit worked in the banking industry. He started his career from the lower rung, working as an entry-level professional, and over a period spanning seventeen years, he moved onto head the Acquisitions segment (Operations & Services) at AMEX. Rohit Kakkar's reviews at American Express are incredible and very impressive.

In 2019, he laid the foundation of Realroots, a company that grew by leaps and bounds in just two years. Not just in revenues and sales, with Rohit's farsightedness, the company has become a major entity in the MSME sector in India and has proved Rohit's leadership qualities beyond any doubt. Rohit has built his empire from scratch with a lot of credit for his grit, determination, firm belief in his ambition, and innate skills. Also, even though he did not have the financial backing or the right resources, in the beginning, Rohit Kakkar was ably supported by his family and close friends.

Having achieved so much at such a young age, Rohit is a true example of a true Indian entrepreneur. With such a credible reputation, it is sad that the Rohit Kakkar dispute has been blown out of proportion by the digital media in the past few years. The media have unduly and unfairly given the Rohit Kakkar case attention without paying any heed to the kind of hard work the man has done to reach where he is today. Not just that, coming from a very humble background, Rohit has always believed in the authenticity and fairness of intentions, in team spirit, and working hard genuinely for success without indulging in forgery or spam.

 

Rohit Kakkar reviews showcase his amazing entrepreneurial skills

Rohit Kakkar, the man behind the inspirational success of the brand Realroots, started from ground zero, bounded by his faith and confidence in his dreams and vision.  It would not be far-fetched to say that Rohit always knew about his innate enterprising skills, even before he stepped into his MBA Alma Mater in Ohio.  But, bound by a Masters in Business Administration, he needs to put his skills and knowledge to the test before he could venture out to set up his own business one day.

He entered the banking industry just after completing his MBA degree as an entry-level executive. He spent about seventeen years in the industry, learning the nitty-gritty of the sector and gaining a lifetime of knowledge. In 2018, when he decided to leave his white-collar job,  Rohit Kakkar was at American Express as the head of Acquisitions (Services & Operations).

Ready to take on the world, he envisioned this was the right time to take the leap in the future and start his business independently. From investing in an agro-based company in Tamil Nadu to the birth of Realroots, the journey was filled with more learning. Eventually, the foundation stone of his dream project was laid, but it also took some time to get the most relevant team on board, find the right place to set up his factory, arrange the funds, and more.

Rohit Kakkar reviews from across the MSME industry in India have been very encouraging and credible so far. His peers and colleagues hold him in great esteem for his incredible leadership qualities, in-depth industry knowledge, and amazingly impressive confidence. With not much support from any quarters except his family mentors and team, Rohit has achieved a lot in a very short time – thanks to his acquired skills and inborn talent. Rohit Kakkar's review at American Express also eloquently point to these aspects. With such awesome qualities, it is no surprise that Realroots have done exceedingly well in its two years of existence.

SWOT Analysis of India's MSME Sector

Globally, the MSME sector is one of the most crucial sectors in any economy because it helps generate employment opportunities and utilize local resources, both natural and human. Also, to develop sustainably, any economy around the globe requires organized industrial development. In India, more than 65% of Indians live in rural areas where establishing large-scale industries can be challenging. But, that is not the case with MSMEs, which is why this sector is so critically essential for India's growth and sustenance.

In this article, we will do a SWOT (Strengths, Weaknesses, Opportunities, and Threats) Analysis of the Indian MSME sector for a better perspective.

 

1.     Strengths Vs. Weaknesses

Strengths

Weaknesses

·       Low investment costs – a Micro unit in the country in the service segment can be started with an investment of INR 10 lakh, while in the manufacturing segment can be started with an investment of less than INR 25 lakh. ·       One of the biggest employers in India – the MSME sector had employed about 110 million people across India in FY 2020. ·       MSME is the largest contributor to the GDP – the MSME sector contributes about 30% to the Indian GDP. In the next couple of years, the targeted percentage is 40%. ·       Agile to changes – being small and micro helps MSMEs to adapt to changes quickly. The administrative and bureaucratic processes are minimal in the sector. ·       Customer-centric – one of the biggest strengths of MSMEs is that they can produce new and modify their products, product line, services, etc., as per the changing demands of their customers. Their customers are at the focal point of their business. ·       Entrepreneurship- most SME units are the work of entrepreneurs seeking independence.

·       Lack of working capital and funds is one of the biggest issues with the sector. Most banks and FIs are hesitant to offer loans to MSMEs. ·       IT resources – unfortunately, in India, the sector is mostly manually operated. Pandemic-like situations become difficult to deal with in the absence of automation, new technology, and computerization. ·       Marketing aspects – the sector lacks a competitive edge, especially internationally, because of the absence of QC, standardization, design control, skilled workers, after-sale services, etc. Competition from bigger brands offers them poor bargaining power, while the lack of management skills at the top level becomes a root cause of failure.

2.     Opportunities Vs. Threats

Opportunities

Threats

·  Encouraging policies and schemes from the government. For example, PM's Employment Generation Program, the Credit Linked Capital Subsidy Scheme, skill development programs like ASPIRE, ESDP, etc. ·    Credit and financial support – in the 2021 Union Budget, the government announced INR 10,000 crore assistance under the Guarantee Emergency Credit Line. ·     The government is also supporting technological upgradation, training, etc., to the sector with schemes like TUF. ·    Marketing support like regular trade promotions, buyer-seller meets, expos, etc., are being organized.

·       Payments from clients are mostly delayed causing working capital shortages. ·       New compliances and taxation laws also affect the morale of the businessmen. ·       Failure of Banks and financial institutions to offer funding to small businesses. ·       Low investment in Research and Development impacts innovation and is a cause of concern. ·       Quality control and standardization are also a big concern with MSMEs in India.

How is the banking sector supporting MSMEs?

The MSME is a crucial sector in the Indian economy. However, micro, small and medium enterprises need funds to set up or grow. Thankfully, the Indian government and the banking sector understand the essence of MSME credit and have come forward through various schemes to grant loans to the sector. After the impact of Covid-19, the role of the banking sector has increased even more than before. Some of the loan schemes that various banking players offer are:

-        MUDRA (Micro Units Development and Refinance Agency Limited) is an NBFC offering a loan to non-corporate and non-farm enterprises in the sector. Under the Pradhan Mantri Mudra Yojana, there are three schemes – Shishu, Kishor, and Tarun to micro-units.

-        The Khadi and Village Industries Commission (KVIC) offers support in self-employment opportunities to artisans in the non-farm sector through the PM’s Employment Generation Programme (PMEGP).

-     The Ministry of Finance established the Small Industries Development Bank of India (SIDBI) to offer financial support to the MSME sector in 1990. The Reserve Bank of India regulates its work.

-      Yes MSME is a program launched by Yes Bank to offer loans to the sector. Besides, the program also offers operational and financial solutions with the help of specialists like Clear Tax and ZOHO to MSMEs.

-      The Ministry of MSME and SIDBI set up a Credit Guarantee Trust Fund for MSMEs to implement a credit guarantee scheme for the sector. The scheme offers loans to the sector without any 3^rd party collaterals.

-        Twelve state-owned banks like SIDBI, SBI, PNB, BoB, BOI, NABARD, TIIC,  SBBJ, Corporation Bank, Indian Bank, and Canara Bank offer subsidies to the MSME sector technology upgradation under the Credit Linked Capital Subsidy (CLCSS) scheme.

Besides the above schemes, different banks offer loans to MSME units without collaterals. Mr.Rohit Kakkar, MD of VSRC Agro Products, has played a crucial role in highlighting issues being faced by the sector during the pandemic and now after the lockdown has been lifted. He feels that the banking sector can do a lot more to support MSMEs during these challenging times.

Government Subsidy on Food Processing

The Indian Food Processing industry is responsible for converting farmed crops and products into packaged and processed food products. India is ranked at number six and at number five in the global retail market in the food and grocery market.

The Indian food processing industry thankfully sources its raw materials indigenously. Here are few positive results from the Indian food industry:

·       Our country is the largest producer of fruits like mangoes, bananas, papaya, guavas, and okra. It is also the biggest producer of milk and ginger.

·       Our country is the second-largest producer of food crops like rice, wheat, tea, sugarcane, and cashew nut.

·       Our country is the third-largest producer of spices like pepper, cardamom, nutmeg, and mace, besides carrot, coconut, and chicory.

 

Subsidies to food processing units

The government takes cognizance of the immense potential of the food processing industry in India and thereby has launched various subsidies, especially for units operating in the MSME sector.  Some of them have been discussed here:

  Small Farmer Agri-business Consortium Assistance

•     Agriculture and Processed Food Products Export subsidy
•     Agro Processing Cluster Scheme
•     CLCSS or Credit Linked Capital Subsidy Scheme for Technology Upgradation
•    Subsidy for small food businesses
•    Venture Capital offered by SFAC
•    Venture Capital by SVLC
•    MSME Ministry financial support for technology upgradation
•    Pradhan Mantri Kushal Vikas Yojana or PMKVY
•  Government assistance for setting up of QC and food testing labs 

Rohit Kakkar – A Trusted Name

RohitKakkar is a man of his words and a force to reckon in. RohitKakkar successfully takes his food processing business idea a notch up with his expertise and skills. Rohit Kakkar's reviews online suggest that he is someone who believes in teamwork. He doesn't prefer working solely, believing that a man can't succeed without a skilled team and unity. For a long time, he had been associated with American Express in a senior position and has very favourable Rohit Kakkar Reviews from American Express.

Kakkar runs a top-notch business today as an entrepreneur by leveraging algorithms like expert collaboration, transparency, integrity, meeting deadlines, and ensuring on-time delivery. Operating a successful business isn't easy; thus, Kakkar adheres to principles like teamwork, integrity, and delivering superior quality goods for ensuring his business operations are smooth; these are some of the things he has learned, thanks to Rohit Kakkar's association with American Express. He aims to ensure that his products are available for everyone across the country which has been affordably priced. Most of the products under his vigilance are produced in-house units and are priced appropriately. The high-quality food items manufactured by his business aim to ensure the wellbeing and health of all citizens while helping them stay grounded to their roots. Rohit is enthusiastic about promoting GenZ talent and is very zealous in understanding their views and ideas associated with high-quality products.

Recently, the social media and the press were briefed about Rohit Kakkar's dispute alleged conflict with another party. But, Rohit is all focused on his work, on his work ethics and values. It is unfair that the Rohit Kakkar case has been unnecessarily highlighted in print and digital media for a person of such high credibility.

Check Rohit Kakkar Reviews American Express to know more about the man and his commitment to professionalism.

Rohit Kakkar's vision is inspiring

Rohit Kakkar is an entrepreneur par excellence. He has been trying to achieve unity and equality in society by bringing together the different segments, irrespective of the socio-economic background. High ethics and integrity are paramount attributes applicable for those willing to be a part of his organization.

Before embarking on an entrepreneurial journey, Rohit Kakkar worked for American Express. He was responsible for leading a team in a multinational company. Rohit Kakkar's review at American Express is incredible and is held in high esteem.

Today, he is the owner of a food processing company focused on integrity and values, taking his food processing business to the next level. Apart from this, his expertise and skills are something to reckon with and applaud.

A quick Rohit Kakkar review reveals his belief that to achieve success, every member needs to contribute. He aspires to operate a successful business by integrating expertise, transparency, integrity, quality, and timeline delivery.

Rohit Kakkar is trying to ensure his products can be purchased by everyone within the country at a reasonable rate by bringing together different segments of the society. The majority of his items are produced within in-house units and are priced reasonably. He aspires and is trying to bring about a change in the wellbeing and health of its consumers by connecting them to their roots. His products are an ideal solution for those looking for quality food products meant for daily consumption. Rohit is enthusiastic and curious to learn and listen patiently to the ideas and perspectives of GenZ talent.

Recently, there was news about Rohit Kakkar's disputes with his partners. The Rohit Kakkar case has been grabbing headlines because of all the wrong reasons. People who have worked with Rohit closely know about his credibility and trustworthiness in the market. Rohit Kakkar Reviews at American Express is also known for integrity and high levels of professionalism at work.

 

Demands of MSMEs -Will the Government pay heed to it?

The MSME sector contributed about 30% to the Indian GDP in 2018-19. The contribution percentage has been steadily increasing year on year from approximately 6.5 crore MSMEs present today.

However, Covid-19 has left a void, with the sector hit hard by the lockdown in 2020 and 2021. Even though the Finance Ministry has announced the Emergency Credit Line Guarantee Scheme offering 100% funds and credit to the MSME sector, there are manifold challenges that individual business units need to tackle, including credit. Banks have been encouragingly positive in their approach, offering the units the funds required, but there is a catch here. Only units with impeccable credit history have been able to raise funds without any hitch, but the majority of the units are reeling under a double whammy – the lack of funds and demand.

Demands of MSMEs

1.     Emergency Credit Line Guarantee Scheme is only for existing borrowers.

Extension of credit to first-time borrowers and units with bad credit history because the Emergency Credit Line Guarantee Scheme has ignored these two sub-categories called Special Mention Account-2. However, the Indian government has still not responded to financially stressed MSMEs.

2.     Interest rates are at par with market rates.

Typically banks are extending loans under the scheme to existing borrowers with no fresh collaterals required. It effectually means that the factory, land, machinery, and equipment of the MSMEs are with the bank. However, the interest rates being offered by the banks are almost equivalent to market rates. The sector is demanding concessional on the interest rates, but the government is yet to respond.

Not just that, while state-owned banks have a lending cap of 9.25%, the Non-Banking Financial Companies can lend up to 14%. Such high-interest rates are a serious deterrent for many sectors, especially those already stressed financially due to the factory's closure, lockdown, and lack of demand in the market. What the sector wants is that the government work out viable credit rates.

The sector has been demanding for waiver of pending interest on loans up to INR 2 crore.

3.     Tackling costs

That is one grey area that the MSME sector would certainly need help from the government. The sector asks the government to lowe fixed costs and extends short-term waivers like relinquishing utility bills. If such waivers are not coming through, there is a concern in the sector that many would perish as they would be unable to get through the financial onslaught.

4.     Paperwork in getting loans from banks

Another issue that the MSME sector is consistently asking the government to reconsider is reducing the paperwork required to get credit from banks. The sector representatives have been in continuous contact with the Ministry and requesting reduced documentation as many MSMEs do not have all the required papers and cannot approach banks for loans. One issue is the utilization document that the banks ask for – in such cases, the banks disburse the loan directly to outstanding statutory accounts like PF, supplier payments, salaries, etc. As a result, the final amount that reaches the unit is considerably low.

Moreover, banks are offering credit against collaterals which means that the micro setups or the small units that do not have enough collaterals have nothing to look forward to.

5.     Help with marketing

Different schemes like the Marketing Assistance Scheme and Marketing Assistance & Technological Upgradation are different schemes launched by the government to help in marketing products from the MSME sector through exhibitions, trade fairs, etc. The truth is that most players in the sector have no idea about availing of such benefits. Also, the sector wants more involvement from the government.

What is CLCS (Credit-linked Capital Subsidy? How it aims to help MSMEs?

CLCSS or Credit-linked Capital Subsidy Scheme is a scheme launched by the MSME Ministry in India for all micro, small, and medium scale enterprises within India.  The reasoning behind launching the scheme was to offer handholding and financial help to the MSME sector to continually and consistently invest in the upgradation of existing machinery, equipment, and technology for better performance and improved productivity. However, since the costs associated with such upgradation can run in crores and it is difficult for most entities in the sector, especially in the rural areas, to afford, the government decided to step in with CLCSS.

Which business entities are eligible for the Credit-Linked Capital Subsidiary Scheme?

The types of business entities that can apply for the scheme and benefit from it include:

1.     Sole proprietorship firms,

2.     Limited liability partnerships,

3.     Partnership firms,

4.     Cooperative societies,

5.     Start-ups,

6.     Private Limited companies and

7.     Public Limited Companies.

The condition is that the business must be a part of the Indian SSI sector. The Ministry of Micro, Small, and Medium Enterprises in India prefers woman-led firms and entrepreneurship firms.

What are the inclusions in the scheme?

The key features of the scheme include:

-        15% upfront subsidy for technological upgradation for institutional credit up to INR 100 crore. It means that the beneficiary unit can get a subsidy up to INR 15 lakh with credit up to INR 100 crore.

-        The upper ceiling that was earlier INR 40 lakh had been raised to INR 1 crore.

-        The subsidy rate has been improved from 12% to 15%.

-        The admissible capital subsidy is not linked to the term loan but with the investment in purchasing the plant and machinery.

-        Earlier SSI units were categorized in different slabs based on their current investment, and then the eligible subsidy was calculated. However, this clause has been removed now.

-        The identified subsector and technologies can also get reviewed flexibly from time to time.

-        The application can be submitted online and tracked online.

 

Purpose of CLCSS

The primary cause of the launch of the CLCSS is to help the Indian small-scale sector with:

-        Induction of state-of-art or near art-of-art technological upgradation.

-        Stepping up from the current technology level to higher levels.

-        Replacing plants and machinery/equipment or acquisition of new machinery & equipment.

-        The purpose is to improve productivity and product quality

-        Improve the working environment of MSMEs.

-        Installation of better packaging techniques.

-        Installation of anti-pollution measures.

-        Equipping the unit with energy conservation machinery.

-        Units can start with in-house testing facilities as well as invest in digital quality control measures.

The Credit Linked Capital Subsidy Scheme ensures fair distribution of the scheme amongst different socio-economic categories and scales of businesses. Hence, the scheme focuses on women entrepreneurs, entrepreneurs from the SC/ST categories, and entrepreneurs from the North-Eastern Region, Hill states of J&K, Himachal Pradesh, and Uttarakhand.  Emphasis is also given to entrepreneurs to island territories like Lakshadweep and Andaman & Nicobar Islands and identified Aspirational Districts.

Beneficiaries can approach and apply to scheduled commercial banks, Regional Rural Banks, North-Easter Development Financial Institutions, State Financial Corporations, and scheduled cooperative banks that include urban cooperative banks formed by SIDBI as part of the Technological Upgradation Fund (TUF).

 

Rohit Kakkar – The man with a mission

Rohit Kakkar is a known name in the industry. RohitKakkar from American Express has been contributing positively to society. Having a holistic approach, Rohit Kakkar went on to open his food processing business to empower not only himself but also his team members. Rohit Kakkar's reviews have been part of many futuristic platforms that have saluted his spirit and commitment to business ethics and integrity.

Rohit Kakkar's reviews at American Express portray how he has worked honestly to help his division reach exponential heights at AMEX. Being fully committed to helping his team and business reach their true potential, he believes in collaboration and involving all stakeholders progressively – be it the end-customer, employees and staff members, investors, or the farmer who cultivates the raw materials. He treats them as his team and believes that everyone has a vital part of this incredible journey.

Whether it is his business or AMEX, he takes pride in helping every individual climb the ladder of success. Rohit Kakkar Review at American Express unravels how he has always recruited team members who aren't afraid of thinking outside the box.

He is willing to promote the GenZ talent on a wide scale to ensure the distribution of high-quality products only. As per his views, GenZ has immense potential and power, which can be directed towards making a positive change in the lives of others and the community as a whole. Choosing a high-quality food item over others can make a huge difference in society, and the youngster crowd has a big role to play here.

Recently, you must have read about the Rohit Kakkar case in the newspapers and social media.  The Rohit Kakkar dispute has been unnecessarily blown out of proportion by a certain media section without realizing Rohit's professional ethics and involvement in all his endeavors.

The visionary – Rohit Kakkar

A man and his vision, Rohit Kakkar has always had it in him because success for him was never about his growth but about a team. Before becoming an entrepreneur, he was associated with the AMEX where Rohit Kakkar reviews at American Express have been that of a visionary.

When he embraced entrepreneurship, it was about making a true difference to society. It was about his commitment to collaborate rather than glorifying his ideas and ideologies from the very beginning. As per Rohit Kakkar's reviews from his teammates, vendors, and consumers, he is a man to look up to in every sphere of life. No doubt, his business is a roaring success today because of his honest endeavour to bring in a change at the grassroots level.

Beginning from the farmers who are one of the biggest pillars of his agro-business supplying raw materials to the end customer who procures the processed food from his brand, he ensures end-to-end uprightness and integrity.  He has always followed the policy of 100% transparency throughout the lifecycle of manufacturing products with his investors and employees. Rohit Kakkar from American Express has ensured that his transition from being a senior employee at AMEX to becoming an entrepreneur is one of collaboration and teamwork. His commitment to producing quality and high-standard products is reflected well in his business strategy and professional approach.

Recently, there was news of Rohit Kakkar's dispute with certain partners in his business venture. A certain part of the media has been trying to tarnish the well-earned name of Rohit Kakkar. One can read an online Rohit Kakkar Review at American Express to gauge his true potential as a leader. There have been concerted efforts to highlight the Rohit Kakkar case in a bad light to put down a person's honest endeavour to spearhead a successful business in the corporate world.