empowering msmes - skills development of the msme sector - part - 7

Skills Development of the MSME Sector

Part 7

Empowering MSMEs Role of Banks & Financial Institutions, IT, Skill Development & Rating Agencies


One of the thrust areas for increasing the competitiveness of MSMEs includes skills development. Skills development not only helps in improving productivity but also fosters entrepreneurship. Hence, it is imperative for the concerned governmental agencies, trade associations and MSMEs to come together and discuss on how to make training programmers relevant and attractive for MSMEs. The lack of human resources has been a long-standing problem faced by MSMEs in the country. Despite India’s large pool of human resources, the MSMEs continue to lack skilled manpower required for manufacturing, marketing, servicing, etc.


Majority of the graduates passing out each face difficulties in getting employed in MSMEs due to the lack of job / role specific skills. Also, it has never been easy for MSMEs to hire the right workers at affordable prices. Another area of concern is low focus of MSMEs on skills development. Even though MSMEs are investing in infrastructure, technology and manufacturing practices, development of skilled manpower still remains a major concern. There is evidence that suggests that MSMEs that have invested in skill development have witnessed better business performance. Skill development programs with a blend of industrial engineering, quality management, general management and soft skills can enable the MSMEs to reach the next level of growth.

Importance

• To inculcate entrepreneurial qualities among the youth.• To retrace the high growth path, the MSME sector assumes a pivotal role in driving the growth engine. The MSME sector in India continues to demonstrate remarkable resilience in the face of global and domestic economic circumstances.• The sector has sustained an annual growth rate of over 10% for the past few years.• The sector has shown admirable innovativeness and adaptability to survive economic shocks, even of the gravest nature.

Importance

• Calibre for employment generation, low capital and technology requirement, promotion of industrial development in rural areas, use of traditional or inherited skill, use of local resources, mobilization of resources and exportability of products. • Generates around 100 million jobs through over 46 million units situated throughout the geographical expanse of the country. With 38% contribution to the nation’s GDP and 40% and 45% share of the overall exports and manufacturing output, respectively, it is easy to comprehend the salience of the role they play in social and economic restructuring of India .

Skill development of entrepreneurs in MSME sector

Initiatives for MSME skill development 1. National Policy on Skill Development 2009 In the last five years India has made progress towards developing the assets to drive skill training at scale. National Skill Development Corporation 2009 ensured the training programmes and courses for the same. 2. National Skill Qualification Framework 2013 It is anchored at NSDA and efforts have been initiated to align skilling and education outcome.


3. Sector Skill council This ensures that the skill development efforts begin made by all stalk holders in the system are accordance with the actual needs of industry. 4. Skill India' mission through the Pradhan Mantri Kaushal Vikas Yojana will help increase the availability of a skilled workforce in the MSME sector. Includes the following ten major directions to achieve the objective set • Aspiration•Capacity•Quality•Synergy•Mobilization and engagement


• Global Partnership • Outreach and advocacy • ICT Enablement• Development of trainers • Inclusivity


5. The National Policy on Skill Development and Entrepreneurship, 2015 The objective of the National Policy on Skill Development and Entrepreneurship, 2015 will be to meet the challenge of skilling at scale with speed and standard (quality). It will aim to provide an umbrella framework to all skilling activities being carried out within the country, to align them to common standards and link the skilling with demand centres. In addition to laying down the objectives and expected outcomes, the effort will also be to identify the various institutional frameworks which can act as the vehicle to reach the expected outcomes. The national policy will also provide clarity and coherence on how skill development efforts across the country can be aligned within the existing institutional arrangements. This policy will link skills development to improved employability and productivity.


6. Start-up India Action plan : Ease of doing business, taxation, access to capital for MSMEs and skilling. 7. Employee Pension Scheme CRISIL believes the government's proposal to pay the Employee Pension Scheme contribution of 8.33 per cent for all new employees enrolling in the Employees' Provident Fund Organisation for the first three years of their employment is a big incentive for MSMEs.


8. Enterprise and skill development: Entrepreneurship /skill development programmes launched by the Ministry is one of the key elements for promotion of MSEs (Micro and Small Enterprises) particularly for the first generation entrepreneurs. The Entrepreneurship Development Programmes (EDPs) are conducted through MSME-DIs (Development Institutes), which focus on improving entrepreneurial skills and developing industry specific skills in areas such as electronics, electrical, food processing, etc. to develop and enhance the skill of the entrepreneurs.


9. MSE - Cluster Development Programme (CDP) The implementation of MSE-CDP is for the holistic development of selected MSEs clusters through value chain and supply chain management. The Ministry has adopted a cluster development approach as the key strategy for enhancing the productivity and competitiveness as well as capacity building of Micro and Small Enterprises (MSEs) and their collectives in the country. Clustering of units also enables providers of various services, including banks and credit agencies to provide their services more economically, thus reducing costs and improving the availability of services for these clusters.


10. National Competitiveness Programme (NMCP) Schemes The Ministry announced the formulation of National Competitiveness Programme (NMCP) in 2005 with the objective to support the Small and Medium Enterprises (SMEs) in their endeavour to become competitive and attune themselves to the competitive pressure caused by liberalization..

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empowering msmes - skills development of the msme sector - part - 7

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