Effectiveness of Government Policies for the

MSME Sector in India“Reflecting the situation at the Grassroots Level”

26th March 2011

22

Approach

Survey was conducted with MSMEs.

Respondents belonged to different geographies and were spread across the nation

Size of the organizations of the respondents was spread between 10 lakhs to 5 crore

The respondents operated in different industries

With respect to several initiatives of the government, the respondents were

questioned to determine:

Levels of awareness

Extent of people who have availed them

Experiential Rating

33

High levels of unawareness of MSME Act

The awareness about the

MSME Development Act

at the grassroots level

has increased from 25%

to 41% during the last 1

year but still 59%

MSMEs are unaware

44

Availed benefits of Government Initiatives

55

Government Schemes: Benefits availed by MSMEs

66

Effectiveness Rating of the MSME Schemes

Scheme East North South West Total

ISO 9000/14001 Certification Fee reimbursement Scheme 2.97 3.9 3.05 3.04 3.07

MSME Cluster Development Programme 2.89 3.41 2.83 2.65 2.96

Credit Linked Capital Subsidy Scheme 2.8 3.5 2.74 2.57 2.92

Training and skill development programmes 2.93 3.22 2.28 2.75 2.78

NCEUS & Apex body initiatives 2.33 3.3 2.29 2.27 2.72

Performance and credit rating scheme 2.61 2.7 2.61 2.67 2.63

Credit Guarantee Scheme 2.69 3.07 2.56 2.14 2.6

Integrated Infrastructure Development Scheme 2.37 2.27 2.55 2.13 2.34

National Manufacturing Competitiveness Programme 2.38 1 1.64 2.33 1.96

77

Corruption and its impact

Levels of Corruption Adverse Impact of Corruption

88

Effectiveness of Government Schemes

99

Efficacy Index

The efficacy index was calculated for the MSME Policies of the Government & the

ecosystem based on the following factors:

Level of awareness of schemes at the grassroots level

Effectiveness of the schemes offered by the Government

Ease of usage of the scheme

Based on these calculations, the efficacy index was calculated as 35% which is very

low as compared to the targeted 100%. Hence, the MSME sector in India still requires

focused and sincere efforts to realize their true potential.

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