Micro, Small and Medium Enterprises (MSMEs) have been an integral part of the country’s economic growth in the history of India as an independent nation. Small businesses have contributed significantly to job creation, innovation, and economic prosperity. However, there has been a lack of recognition of MSMEs’ potential during those times. Recently, the Government has realised the sector’s potential and is taking steps to promote its growth. India is celebrating its 74th Republic Day on 26th January 2023.
Republic Day is an important day for India as it commemorates the adoption of the Constitution of India in 1950, which established India as a sovereign, socialist, secular and democratic republic. The theme of Republic Day 2023 is Jan Bhagidari, or people’s participation, which aims to encourage the involvement of the Indian people in implementing policies and their active contribution to the country’s progress.
MSMEs are a significant contributor to the country’s GDP, accounting for over 30% of the country’s GDP and nearly 50%. The industry is the second-largest employment generator in India as of FY 2022, employing more than 111 million people.
MSMEs are essential for the growth of the Indian economy and the development of rural and urban areas. Hence, they have the potential to contribute significantly to the country’s economic progress and provide a boost to the economy. Despite the challenges faced due to the pandemic, MSMEs have been resilient and have continued to remain a key driver of economic growth. The Government of India recognises the contribution of MSMEs towards the nation’s economic growth and prosperity by initiating several schemes like the ‘Make in India’ initiative to promote and strengthen the MSME sector.
The Make in India programme aims at utilising the existing Indian talent base, creating additional employment opportunities and empowering the secondary and tertiary sectors. The programme also aims to reduce importing goods and products from foreign countries and improve India’s rank on the Ease of Doing Business index by eliminating unnecessary laws and regulations. It also makes the bureaucratic processes easier, making the Government more transparent, responsive and accountable.
Since the early days of our nation’s formation, India has evolved drastically economically and politically. The initial phase of consolidation and rapid changes gave way to collective progress, and we have come a long way since. Our nation is now one of the world’s fastest-growing large economies. We have established strong economic and political ties with other countries, allowing us to increase trade and investment. Over time, India has also built strong and efficient infrastructure, allowing the population to access resources easily.
A major turning point in the country’s history during the 1990s was the privatisation of the Indian economy. After decades of heavy state control and regulation, the Government allowed private companies to enter the market and compete with state-owned enterprises. This created a more dynamic market and allowed the private sector to play a major role in economic growth. According to the Reserve Bank of India, India’s GDP growth rate increased significantly from 5.8% in the pre-privatisation period to 7.4% following privatisation.
The privatisation of the Indian economy brought about several changes to the goods and services market.
The introduction of privatisation also greatly impacted the Indian economy in general.
Privatisation opened vast opportunities for MSMEs, with the new possibility of expanding their market reach even beyond Indian shores and hence, their revenue source improved. While the market scope expanded, MSMEs faced several challenges, including access to financial resources and inadequate know-how of emerging processes. The lack of availability of formal credit made it difficult for them to hold their own in an increasingly competitive market.
However, the situation has since evolved, and the Government of India is now introducing digital infrastructure and policies to support the growth of MSMEs. This includes the introduction of online platforms, the simplification of processes, and the provision of incentives to businesses. The Government is also promoting the use of technology amongst MSMEs to help them become more competitive. These measures are expected to boost the growth of MSMEs, providing a much-needed economic boost to the country.
The next few decades are bound to be a tremendous growth and development phase for India. Prime Minister Narendra Modi stated on the occasion of the 75th anniversary of India’s independence that the next 25 years, leading up to the centenary, referred to as the ‘Amrit Kaal’, is the journey of new India. It will be a period of national development and glory and an era when the country will play an important role in giving direction to the world. “It is just the beginning of the golden era,” the PM reiterated on several occasions, adding that MSMEs will be a major driver of this growth as India moves toward becoming a $5 trillion economy.
Amrit Kaal will be a time of great transition and an incredible opportunity for MSMEs to make a real difference in the country. With the right support, MSMEs could drive India’s economy, creating more jobs and providing goods and services to the masses. The Indian Government has already taken steps to improve the regulations and incentives for MSMEs, such as making loan application processes easier and providing tax breaks and other benefits. This is a great start, but there is still much more to be done. There needs to be more focus on improving access to financing and training, as well as providing better infrastructure support. Additionally, the Government must continue to make strides to reduce corruption and bureaucracy, allowing MSMEs to flourish and reach their full potential.
Republic Day celebrations in India occurs in every state. But, the main celebration is in a grand event in the capital city, Delhi. The famous Republic Day Parade takes place on this day. The parade starts from Rashtrapati Bhawan along the Rajpath and then ends at India Gate, which showcases the defence capabilities of India, including marching contingents of the Army, Navy, Air Force and Police. It also showcases the country’s various cultures and traditions, including performances by schoolchildren, tableaux and floats depicting the diversity of India. The Ministry of MSME presents tableaux on the occasion of the Republic Day Parade. The tableaux showcase the success stories of the MSMEs and their role in the country’s development and also highlight the various initiatives taken by the government to promote the MSME sector in India.
The Prime Minister and the President of India visit Rajpath on the day. The event starts with the Prime Minister presenting a wreath at Amar Jawan Jyoti at India Gate. This is to pay respect to the soldiers who lost their lives fighting for the country. Then the President starts the event by hoisting the national flag of India. The National Anthem is sung, followed by a 21-gun salute by the soldiers.
The celebration of Republic Day is not just limited to the capital city. Across the country, people from all walks of life come together to celebrate the day with patriotic fervour. This includes the MSME sector, the backbone of the Indian economy providing employment and livelihood to millions nationwide. On the occasion of the 74th Republic Day, let us pay tribute to the hardworking entrepreneurs and workers of the MSME sector who continue to make incredible contributions to the economy. Let us also recognise our Government’s efforts in providing support and assistance to the MSME sector.
Republic Day is an important day for MSMEs in India. It marks the anniversary of adopting the Constitution of India in 1950, which declared India a sovereign, secular, democratic republic. This day is celebrated with great enthusiasm and patriotism throughout the country. It is an occasion to remember the freedom fighters’ sacrifices and honour the nation’s progress over the years. MSMEs can celebrate Republic Day by hosting flag-hoisting ceremonies, cultural programmes, sports tournaments and other activities. These events help to raise awareness about the importance of the MSME sector and its contribution to the country’s economic growth.
Moreover, MSMEs can launch new products and services, organise promotional activities, and participate in various exhibitions and fairs organised across the country on Republic Day. This gives them a platform to reach potential customers and increase their brand visibility. In addition, MSMEs can also use this day to recognise their employees’ hard work and dedication and create a better working environment. MSMEs also have the opportunity to showcase their products and services to the public on Republic Day. This is a great way to gain visibility and increase sales and profits. It is also an ideal time to connect with customers, build relationships, and generate new leads.
MSMEs also use Republic Day as an opportunity to honour their employees and thank them for their hard work and dedication. They organise special events and award ceremonies to recognise their employees’ contributions. This helps boost morale and encourages them to work harder. The celebration of Republic Day is a reminder of the importance of democracy and the rule of law in India. It is a reminder of the rights and freedoms that have been bestowed upon us by the Constitution of India. In addition, Republic Day is a great time for MSMEs to give back to the community. Businesses can sponsor events, donate to charities, and participate in activities that promote social and economic development. This is a great way for MSMEs to show their support for the nation and positively impact society.
NBFCs (Non-Banking Financial Companies) are a critical resource for MSMEs. They provide MSMEs access to the capital they need to grow and thrive. NBFCs like Kinara Capital help MSMEs make better decisions by providing valuable insights into the competitive landscape and industry trends. Kinara Capital is a women-led fintech company transforming lives, livelihoods and local economies by providing fast and flexible business loans to small business entrepreneurs in India without property collateral.
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