In an inspiring speech delivered at the celebration of World MSME Day at The Capitol Hotel, Bangalore, Dr. Vijayamahantesh B Danammanavar IAS, Director (MSME), Department of Industries and Commerce, Government of Karnataka, outlined a comprehensive and ambitious vision for the future of Micro, Small, and Medium Enterprises (MSMEs) in Karnataka. Speaking to a distinguished gathering of industry leaders, entrepreneurs, and dignitaries, Dr. Danammanavar emphasized the crucial role of MSMEs in driving economic growth, fostering innovation, and ensuring sustainable development.
Recognizing the Global Potential of MSMEs
Dr. Danammanavar began by acknowledging the global significance of MSMEs, noting that they account for approximately 50% of the global GDP, represent around 90% of businesses, and contribute to 70% of employment worldwide. He highlighted the United Nations General Assembly’s resolution that recognizes the immense potential of MSMEs, marking the 7th anniversary of this important milestone.
India’s Economic Aspirations and the Role of MSMEs
The speech underscored India’s ambitious goal of becoming a $10 trillion economy by 2030, with Karnataka aiming to achieve a trillion-dollar economy by 2032. Dr. Danammanavar affirmed that MSMEs are integral to realizing these objectives, contributing significantly to sustainable, equitable, and inclusive growth.
Karnataka’s Evolving MSME Ecosystem
Karnataka’s MSME ecosystem has been evolving steadily over the past two decades, contributing to both economic and social development by fostering entrepreneurship and generating large-scale employment opportunities. With around 1.5 million registered MSMEs, the state has seen substantial growth, with MSMEs accounting for approximately 40% of state tax revenues.
Related Post :
- Women in Business Leadership Boost ESG Performance: Advantages of Gender Diversity in ESG Outcomes
- Prioritizing ESG Impact: Strategies for Global Leaders
- Insights from the 2022 Sustainability Leaders Survey: The Current State and Future of Sustainable Business Leadership
Challenges and Opportunities
Dr. Danammanavar acknowledged the persistent challenges faced by MSMEs, including limited access to markets, credit, technology, and skills. He shared findings from a baseline assessment survey conducted under the Raising and Accelerating MSME Performance (RAMP) program, funded by the World Bank. The survey revealed significant obstacles, such as:
- Market Access: 38% of MSMEs face challenges in accessing markets, 56% have not availed marketing support under central or state government schemes, and 63% face limited availability of business development service providers.
- Credit Access: 74% face challenges in providing collateral security, 41% find the procedure cumbersome with unclear documentation requirements, and 21% consider borrowing interest rates too high. Additionally, 56% have not availed financial assistance under central schemes.
- Technology Access: 47% use manual machinery for production, 50% lack capital for adopting innovative technologies, and 60% lack confidence to adopt new technologies.
- Skilling: 32% lack awareness about new sector skills, 36% lack technical and soft skills, and there is limited linkage between district industry centers, industrial training institutes, sector skill councils, and industrial clusters.
- Digital Ecosystem: 57% lack awareness about digital technologies, 32% lack awareness about digital marketing, and 39% use third-party websites for marketing their products.
Strategic Interventions and Support
To address these challenges, the Government of Karnataka has introduced several strategic interventions. Dr. Danammanavar outlined various sector-specific policies, including the Aerospace Policy, Karnataka EV Policy, and Coir Policy, aimed at promoting MSMEs. The state is also in the process of developing a new policy dedicated to the MSME sector.
Financial and Infrastructure Support
The Karnataka State Financial Corporation has pioneered credit provision to MSMEs under various schemes. This year, the government announced a significant initiative to reimburse MSMEs for tapping into capital markets, providing a boost to those transitioning from micro to small and small to medium enterprises. Additionally, the government has allocated funds to upgrade infrastructure in industrial areas, enhancing the overall ecosystem for MSMEs.
Export Promotion and Digital Ecosystem
Karnataka’s commitment to export promotion and diversification is evident, with the state ranked third in the Niti Aayog’s Export Preparedness Index for 2022. The government conducts export promotion workshops and provides market development assistance. Furthermore, plans are underway to develop a state-of-the-art MSME portal, creating a one-stop platform for the entire MSME ecosystem, facilitating easier access to resources, support, and information.
Empowering Women and Promoting Inclusive Growth
Dr. Danammanavar placed a strong emphasis on empowering women entrepreneurs. The state aims to develop 50,000 self-help group micro-enterprises over the next two years. Additionally, the Women Acceleration Program under the RAMP initiative focuses on business growth, capacity building, mentoring, and networking for women-led enterprises. Karnataka’s existing policies already provide extra incentives for women entrepreneurs, and these new initiatives aim to further bolster their contributions to the economy.
Looking Ahead
Dr. Danammanavar expressed his gratitude to the Global Council for the Promotion of International Trade and the Confederation of Indian Micro, Small and Medium Enterprises for organizing the event. He congratulated the winners of the National MSME Awards and reiterated the government’s unwavering commitment to supporting the MSME sector in Karnataka.
Dr. Danammanavar’s vision for MSMEs is a testament to the transformative potential of this sector. By addressing challenges, fostering innovation, and promoting inclusive growth, Karnataka is poised to build a stronger future together, leveraging the power of MSMEs to achieve economic prosperity and social development. The government’s proactive measures and strategic interventions aim to create a thriving ecosystem where MSMEs can flourish, driving the state towards its ambitious economic goals.
A Collaboration for Success
The Confederation of Indian Micro, Small and Medium Enterprises expresses its sincere gratitude to the Development & Facilitation Office, Government of India, Bangalore, for their partnership in making this event a resounding success. Additionally, the co-presenters, Global Council for the Promotion of International Trade, Nutty Treats and Foods Pvt Ltd, Vivamoney Solutions Pvt Ltd, and Owlsurf Digital, are acknowledged for their invaluable support.
