India’s approximately 63 million MSMEs, that include about 2.5 million registered ones, contribute about 29% towards the GDP. The registered MSME units are dominated by 2.2 million micro enterprises with 0.24 million small enterprises and 10,981 medium enterprises. The sector presently provides employment to over 11 crore people. These productive units no doubt provide the backbone to our economy.
Khadi and Village Industries constitute a very important segment of this sector. While production of Khadi has more than doubled in five years and sales three times since 2015-16, Village Industry production has nearly doubled during this period. In 2019-20, turnover of Khadi and Village Industries was an impressive Rs 88,887 crore with Khadi fabric products sales reaching a level of Rs 4,211 crore.
The sector produces Khadi apparels and a wide range of products like pickles, honey, hand sanitisers, papad, oil, leather items, cosmetics, soaps and shampoos which are eagerly sought after by ever increasing number of discriminating consumers both within and outside the country. KVI Commission handles as many as 150 products with in-house capacity of excellence in fields like bee-keeping, pottery and bakery.
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Country is now focussed on a policy to bring a transformative change in the villages through innovative, research-based technology, specially adapted for rural areas so as to increase MSME contribution to 40% of GDP and enable 15 crore people to work in this sector.
Over a period of about 75 years, migration of 30% of the country’s population from rural areas has taken place due to lack of growth of the village economy. The present pandemic brought to sharper focus, the trials and tribulations the migrant workers faced. Creating adequate job opportunities in India’s villages would lead to revival of rural economy, arrest distress induced migration and would minimize loss of livelihood during calamities like the present pandemic. Vocation like Bee keeping would not be hit by pandemic related shutdown whereas pavement selling would.
The MSME Ministry is actively working towards launching the e-commerce portal for MSMEs that will help them market and sell their products in India and internationally similar to platforms such as Amazon and Alibaba. The e-commerce portal called Bharat Craft was announced by the government around mid-2019. This would be a live gateway for MSMEs to take products to the global market.
Government already has a business-to-business e-Marketplace to help MSMEs sell to government organizations. With the launch of a government-owned B2C marketplace where MSMEs would be able to sell directly to consumers, Union Minister of MSME, Nitin Gadkari hopes, we “should soon see turnover on the platform to the tune of Rs 10 lakh crore in the next few years.
One of the major challenges faced by MSME owners is over delayed payments which lead to a working capital lockdown, which, in turn, creates a lot of mismanagement of resources, money, and operations. There is now concerted move to pay receivables within 45 days. Government of India is contemplating a law to address this issue.
Odisha’s MSME sector has about 4.50 lakh entities with investment of about Rs 22000 crore and employs about 17 lakh people. Most units are micro enterprises. Sales turnover of the sector continues to be modest. The sector does provide livelihood to 17 lakh people but doesn’t add much to their household wealth. Odisha Khadi & Village Industries Board continue to operate modest—with sales turnover of around Rs 2 crores in a year. Annually about 55000 new MSMEs are coming up in the state which in itself reflects an urge to be entrepreneurial.
However, the state has a long way to go to have a reasonable share of the cake the sector offers. Potential of the state being huge, a road map for five years should be drawn that should plan for employment opportunities for about 60 lakh people and substantial scaling up of the sales turnover of Odisha Khadi and Village Industries Board to the level of at least Rs 1000 crore. These targets shouldn’t be viewed as fancy targets as these takes into consideration the present level of activity the country has been able to achieve. We need to ponder why while India exported Natural Honey worth Rs 634 crore (59537 MT), Odisha Khadi Board & total Honey sales in 2019-20 was worth only Rs 12 lakhs. Our performance must be transformative and sustainable to impact both livelihood and wealth creation.
(DISCLAIMER: This is an opinion piece. The views expressed are the author’s own and have nothing to do with OTV’s charter or views. OTV does not assume any responsibility or liability for the same. The author can be reached at lonewalker.1942@gmail.com)
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