{"id":44183,"date":"2025-05-27T20:33:53","date_gmt":"2025-05-27T15:03:53","guid":{"rendered":"https:\/\/www.nextias.com\/ca\/?p=44183"},"modified":"2025-05-27T20:34:23","modified_gmt":"2025-05-27T15:04:23","slug":"niti-aayog-report-designing-a-policy-for-medium-enterprises","status":"publish","type":"post","link":"https:\/\/www.nextias.com\/ca\/current-affairs\/27-05-2025\/niti-aayog-report-designing-a-policy-for-medium-enterprises","title":{"rendered":"NITI Aayog Releases Report on \u201cDesigning a Policy for Medium Enterprises\u201d"},"content":{"rendered":"\n<p><strong>Syllabus: GS3\/ Economy<\/strong><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>In Context<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The MSME sector is a cornerstone of India\u2019s economy, contributing <strong>nearly 29% to GDP, 40% to exports, and employing over 60% of the workforce<\/strong>. However, it&#8217;s overwhelmingly skewed in favour of micro enterprises:\n<ul class=\"wp-block-list\">\n<li>Micro units form 97% of registered MSMEs.<\/li>\n\n\n\n<li>Small enterprises account for 2.7%.<\/li>\n\n\n\n<li>Medium enterprises make up just 0.3%, yet medium enterprises account for <strong>nearly 40% of MSME exports<\/strong>, showcasing their <strong>potential and strategic importance.<\/strong><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter size-full is-resized\"><img data-dominant-color=\"8dd1ee\" data-has-transparency=\"false\" loading=\"lazy\" decoding=\"async\" width=\"960\" height=\"280\" src=\"https:\/\/wp-images.nextias.com\/cdn-cgi\/image\/format=auto\/ca\/uploads\/2025\/05\/Designing-a-Policy-for-Medium-Enterprises.png\" alt=\"Designing a Policy for Medium Enterprises\" class=\"not-transparent wp-image-44218\" style=\"--dominant-color: #8dd1ee; width:540px;height:auto\" srcset=\"https:\/\/wp-images.nextias.com\/cdn-cgi\/image\/format=auto\/ca\/uploads\/2025\/05\/Designing-a-Policy-for-Medium-Enterprises.png 960w, https:\/\/wp-images.nextias.com\/cdn-cgi\/image\/format=auto\/ca\/uploads\/2025\/05\/Designing-a-Policy-for-Medium-Enterprises-300x88.png 300w, https:\/\/wp-images.nextias.com\/cdn-cgi\/image\/format=auto\/ca\/uploads\/2025\/05\/Designing-a-Policy-for-Medium-Enterprises-768x224.png 768w\" sizes=\"auto, (max-width: 960px) 100vw, 960px\" \/><\/figure>\n<\/div>\n\n\n<h2 class=\"wp-block-heading\"><strong>Why Such Tilt Towards Micro Enterprises?<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Overdependence on informal and subsistence-level micro firms.<\/li>\n\n\n\n<li>A gross under-leveraging of medium enterprises, which are better positioned to scale, adopt innovation, and integrate with global supply chains.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Challenges Faced by Medium Enterprises<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Access to Finance is Limited: <\/strong>Only 37% of medium enterprises can access formal loans. Collateral-heavy procedures, poor risk assessment, and lack of dedicated credit lines are barriers.<\/li>\n\n\n\n<li><strong>Technology Gap: <\/strong>A whopping 82% of Medium Enterprises don\u2019t use advanced tech like AI, IoT, or digital automation \u2014 hindering their productivity and global competitiveness.<\/li>\n\n\n\n<li><strong>Skill Mismatch: <\/strong>About 88% of medium enterprises don\u2019t benefit from any government skill or training program. Training modules are either outdated or inaccessible.<\/li>\n\n\n\n<li><strong>Low Scheme Awareness: <\/strong>Over 90% are unaware of key government portals or schemes like RAMP, ZED, or GeM. Even when aware, bureaucratic complexity hampers usage.<\/li>\n\n\n\n<li><strong>Heavy Compliance Burden:<\/strong> Multiple inspections from labour, health, and safety departments increase transaction costs and reduce ease of doing business.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Why Do Medium Enterprises Matter?<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>High Forex Yield: <\/strong>Each medium enterprise generates \u20b939.95 crore in forex income, compared to \u20b98.3 crore by small and just \u20b91.39 crore by micro units.<\/li>\n\n\n\n<li><strong>Innovation Leaders<\/strong>: Medium enterprises contribute 81% of total MSME R&amp;D expenditure, investing in automation, AI, and process improvements.<\/li>\n\n\n\n<li><strong>Employment Generators: <\/strong>With an average of 89 employees per unit, medium firms create far more jobs than micro (5.7) and small (19.1) units.<\/li>\n\n\n\n<li><strong>Profitability and Scale:<\/strong> These firms benefit from economies of scale, better infrastructure, and investment capabilities, ensuring higher return on capital and sustained competitiveness.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Policy Recommendations<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Tailored Finance Instruments:<\/strong> Launch a working capital scheme tied to enterprise turnover, with fast-track approvals.\n<ul class=\"wp-block-list\">\n<li>Introduce a \u20b95 crore ME credit card at market rates with minimal collateral.<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>Technology Upgradation through Competence Centres: <\/strong>Convert existing tech centres into India ME 4.0 hubs, offering access to Industry 4.0 tools for sectors like ESDM, pharma, and sports.<\/li>\n\n\n\n<li><strong>Focused R&amp;D Ecosystem:<\/strong> Establish a 3-tier funding mechanism (Expert Committee \u2192 Proposal Solicitation \u2192 Monitoring).\n<ul class=\"wp-block-list\">\n<li>Use Self-Reliant India Fund (SRI) to finance sector-specific innovation projects.<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>Cluster-Based Testing and Certification:<\/strong> Expand MSE-CDP to include medium enterprises.\n<ul class=\"wp-block-list\">\n<li>Set up testing labs in regional ME clusters to ensure quality compliance, especially in exports.<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>Customized Skill Development: <\/strong>Design export-oriented, sector-specific training curricula.\n<ul class=\"wp-block-list\">\n<li>Integrate ME modules into existing ESDP programs with help from the Ministry of Skill Development.<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>Centralized Digital Support Portal:<\/strong> Develop a dedicated ME sub-portal under Udyam with scheme discovery, compliance tracking, and market intelligence modules.<\/li>\n<\/ul>\n\n\n\n<p><strong>Source: PIB<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<h3><strong>In Context<\/strong><\/h3>\n<li class=\"ms-5\">The MSME sector is a cornerstone of India\u2019s economy, contributing nearly 29% to GDP, 40% to exports, and employing over 60% of the workforce. However, it&#8217;s overwhelmingly skewed in favour of micro enterprises:<\/li>\n<p><\/p>\n<h3><strong>Challenges Faced by Medium Enterprises<\/strong><\/h3>\n<li class=\"ms-5\">Access to Finance is Limited: Only 37% of medium enterprises can access formal loans. Collateral-heavy procedures, poor risk assessment, and lack of dedicated credit lines are barriers.<\/li>\n<li class=\"ms-5\">Technology Gap: A whopping 82% of Medium Enterprises don\u2019t use advanced tech like AI, IoT, or digital automation \u2014 hindering their productivity and global competitiveness.<\/li>\n<li class=\"ms-5\">Skill Mismatch: About 88% of medium enterprises don\u2019t benefit from any government skill or training program. Training modules are either outdated or inaccessible.<\/li>\n<li class=\"ms-5\">Low Scheme Awareness: Over 90% are unaware of key government portals or schemes like RAMP, ZED, or GeM. Even when aware, bureaucratic complexity hampers usage.<\/li>\n<p><a href=\"https:\/\/www.nextias.com\/ca\/current-affairs\/27-05-2025\/niti-aayog-report-designing-a-policy-for-medium-enterprises\" class=\"btn btn-primary btn-sm float-end\">Read\u00a0More<\/a><\/p>\n","protected":false},"author":15,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[21],"tags":[],"class_list":["post-44183","post","type-post","status-publish","format-standard","hentry","category-current-affairs"],"acf":[],"jetpack_featured_media_url":"","_links":{"self":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/44183","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/users\/15"}],"replies":[{"embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/comments?post=44183"}],"version-history":[{"count":3,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/44183\/revisions"}],"predecessor-version":[{"id":44221,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/44183\/revisions\/44221"}],"wp:attachment":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/media?parent=44183"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/categories?post=44183"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/tags?post=44183"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}