The Micro, Small, and Medium Enterprise (MSME) sector is a key sector of the Indian economy that contributes significantly to innovation, employment generation, and exports that promotes the inclusive growth of the economy. As per the 2020-2021 annual report, its vast network comprises 633.88 lakh units, where 51% are rural and 49% are urban. The sector has recently created over 11.10 crore jobs and is expanding across several sectors of the economy, encouraging the production of a diverse range of products and services to fulfil the dynamic demands of both the domestic and global markets.
The Rajasthan Government recently launched the new MSME Policy 2022 to identify and facilitate the development of new and upcoming MSMEs. The Micro, Small, and Medium Enterprises Development Act was initially launched in India in 2006 to create a framework for encouraging and enhancing the development and competitiveness of MSMEs.
Banks have charted a unique document called MSME policy to create a standardized approach with a single point of reference to all dealings with MSMEs matters. It’s a formal policy document featuring the banks’ role and their approach to fulfilling the needs of MSME clients. While lending to MSMEs is an integral aspect of the MSMED Act, lending guidelines by the RBI also feature in the policy.
Rajasthan Government - MSME Evolution
The Rajasthan Government recently added another feather in its cap by implementing a framework for assisting MSMEs and similar sectors in the state. It was a significant move in the state’s economic development when Rajasthan Industries Minister Shakuntala Rawat officially launched the MSME Policy 2022, which envisions setting up 20,000 new units with a cumulative investment of INR 10,000 crore, aiming to create jobs for 1 lakh people.
The MSME loan scheme in Rajasthan was officially announced in the state budget 2022-23 with a view to promoting MSMEs by providing loans on easy terms to enable small business owners and investors set up their ventures without the usual fuss. The announcement took place during the Udyog Ratna and Export Promotion Awards in Jaipur, and the Rajasthan Industries Minister indicated that the policy will benefit artisans across metal, textile, ceramic, wood, carpet, leather, painting, jewelry, craft, and many more industries. There will be over 50,000 new employment opportunities in the state over the next five years.
This MSME subsidy scheme in Rajasthan also provides technical assistance and a conducive regulatory environment that boosts the contribution of MSMEs to the state’s Gross Domestic Product and enhances exports.
An Uplifting Move
Shakuntala Rawat also launched the state’s first Handicrafts Policy on the same day to improve employment opportunities for artisans and craftsmen. The policy focuses to revive extinct arts sector, and develop the handicrafts sector, thereby setting the platform for creating new job opportunities in these sectors.
Individuals working in this sector will enjoy a plethora of benefits like brand building, online marketing opportunities, social security, scholarships, assistance to participate in fairs, expansion of infrastructure facilities, setting up handicrafts parks or design centers, and many more.
Loans under these MSME schemes in Rajasthan are given for manufacturing, services, and other similar enterprises. Loans are sanctioned through financial institutions like nationalized commercial and private-sector banks and scheduled small finance banks. Urban co-operative banks, regional rural banks, and Rajasthan Financial Corporation.
A provision of 150 crores is reserved for the same and will remain effective up to March 2024. The scheme grants a loan of up to 10 crores for new manufacturing and services industries, and 1 crore for units undergoing expansion, diversification, or modernization.
The schemes include composite loans, term loans, and working capital loans with cash credit limits. The RBI guidelines state that collateral security is not needed for loans up to INR 10 lakhs. Applications for loans over 10 lakhs are scrutinized by the District Level Task Force Committee before forwarding same to the bank. Another benefit is the state government provides interest subsidies on these loans.
Over 90% of the enterprises in Rajasthan come under the MSME category, and it’s crucial to consider their diverse requirements and provide the security and empower them to flourish.
A Facelift for Rajasthan Exports Council
The innovative MSME loan scheme in Rajasthan is also a promising move to give the state’s export council a significant boost. The council has recently aimed to achieve exports worth INR 1 lakh crore from different sectors to enhance livelihood opportunities in rural and semi-urban areas and earn more foreign currency.
The last four years have been a flourishing period, with over 37.33 lakh people employed in the MSME sector in Rajasthan. The contribution to the GDP during this time is estimated to be 24.50%, and the total export of MSME industries for the financial year 2021-22 is 72,000 crores.
These facts provide a strong background for boosting the MSME sector in the state and contribute richly to the nation’s economic and cultural development in the coming years. The state government will continue to create a better regulatory environment for the MSME sector, and the policy will extend improved financial and technical assistance to existing and newcomers in this sector.