MSME Senerio in India
In 1969, Indira Gandhi nationalised the banks. one of the agenda may be to tackle unemployment by directional lendings. From that time, until today, in one form or the other same is continuing. As of today, 1 job can be created by 50000 to 300000 capital investment.
Few pointers I would like to bring out:
1. All these years, a lot of entrepreneurs are created but there are failures in ventures. This has created a lot of social disorders like entrepreneur's kids are not ready to join the venture as succession.
At some stage in their life, children ask "What did you do for me" and they desert parents.
For the last 30 to 40 years, I am trying to inform academia and scholars to study the impact of failed entrepreneurs and its social effect.
2. We have created app 6cr MSME employing 11cr people i.e., 44cr lives. During the last 3 years, the rate of growth of MSME may be 15-20% year on year. But if we take NPA(as per MSME Pulse) app 90000cr, I feel most of this enterprise can be revived by spending 15000cr thus saving 1cr jobs.
3. The article by your team is indicating faith in small entrepreneurs like microfinance but why all NBFC/Fintech in this space, a fund for sick MSME. All NPA in MSME may not be making of entrepreneurs. It can be other stakeholders like Banks, Govt market.
Example, because of the plastic ban in many states, a lot of these units are going to close. One estimate says app 7.5lacs jobs are stake. Can any alternative be thought?
From 2011-2013/14, in Andhra, severe power cut was there. Only 3 to 4 days in a week, power was available which has forced many at least 40% of MSME to became weak/sick and lakhs of jobs are lost.
4. During the last 40/50 years, govt has thought of EDP and various training programmes but it has not reached to lakhs of entrepreneurs as it has not been made compulsory and it has not been marketed well.
5. I also feel, because of NPA many entrepreneurs have started milking banking system or played with all stakeholders.
If they make more profit, they would like to suppress and create black money and if they make a loss, they inflate and hope to recover.
Their CA'S are to be blamed.
6. During 3 to 5 years journey, all entrepreneurs shall understand their own balance sheet(original or fudged) and derive corrective steps. This will increase their operating profit and thus repaying capacity.
These are few points to be considered by all stakeholders in this area.