Modern MSME Can Be Backbone For High Growth Business: Report | SupportBiz


Modern MSME Can Be Backbone For High Growth Business: Report

Tags: msme
The GDP growth rate is likely to achieve 8.5 per cent level and India is expected to be an about USD 5 trillion economy by the year 2025, it said adding the MSME segment has the potential to emerge as a backbone for this economy and act as an engine for growth, given the right set of support and enabling framework.

New Delhi: Modern MSME can be the backbone for high growth businesses, especially in view of 'Make in India' initiative, a report today said while identifying infrastructure, skill India, tax sops among others as factors that would boost the sector.

"MSME can be the backbone for the existing and future high growth businesses with both domestic and foreign companies investing in the 'Make in India' initiative and make significant impact in the area of indigenization. 'Make in India' with zero defect and zero effect, is a significant opportunity, a CII-KPMG report said.

It asked the government to provide direct and indirect tax benefits by way of zero tax for the first five years ( Micro Enterprises); 10 per cent tax slab for 10 years ( Small Enterprises) and 15 per cent tax slab for 15 years ( Medium Enterprises).

It said the 'Digital India' revolution also provides a great opportunity to promote MSME participation in the Information, Communication and Telecommunication sector, in line with the government vision.

"It is equally important that the segment develops in all areas of agriculture, manufacturing and services s each of these sectors will continue to be very relevant to the overall GDP growth as well as employment generation," it said.

Focus on areas such as infrastructure, regulatory environment, funding facilities, and skilling would help in strengthening the sector.

There is a need to significantly increase the share of MSME contribution to GDP from the current 8 per cent to 15 per cent by 2020 and enhance its contribution across key public and private industry sectors fulfilling increasing domestic demand, growth in exports, indigenization and import substitution, it added.

The report suggested that to make MSME a robust sector, the government should bring various stakeholders such as equity funds, banks and financial institutions, industry majors and MNCs, regulators across various ministries and trade associations.

On infrastructure, it recommended for world class infrastructure at national, regional and industry sector specific clusters and business centers for MSME.