Azadi ke Amrit Mahotsav ki ki bahut bahut shubhkamnaen. Today as we celebrate the 75th Independence Day, a big Salute to one and all the Freedom Fighters who gave us the opportunity to experience and enjoy freedom.
Independent means Atmanirbhar and not just in the sense of Geogrpahical boundaries but also in terms of economic, social, geopolitical and financial.
While as a geography we are independent and the government is putting all its efforts towards accelerating the economic, social and financial independence, our role as citizens and the role of MSMEs as economic engines is very very critical to the future of this great nation.
In the last 75 years MSMEs have contributed significantly to the GDP of the country, generated employment and export revenue and this shall continue. But what is thought provoking is, have the MSME's in India achieved real independence. The answer is quite the contrary. Even today the Indian MSMEs continue to be dependant economically and financially. This came out glaringly during the pandemic when despite a dozen of support schemes being announced by the government, MSMEs continue to struggle just for survival.
We tried to analyse the reasons as to why MSMEs are still a long way to go to be atmanirbhar in the true sense.. Firstly we need to acknowledge the fact that for any business to sustain and grow the four pillars - People Process Infrastructure and Funds have to be built and integrated in a manner that each area of operation from Sales, Purchase, Inventory,Supply Chain, Logistics, Accounts, Finance, individually and in integration work seamlessly.
Now lets take a look at what is the status of MSMEs with respect to each of the four pillars:
People: Most of the MSMEs in India are either family owned or Soleproprietorship companies.The leadership in these organisations is single handed and believes that the legacy people have been delivering well and can continue. But they fail to understand that as the business grows or if they intend to grow, either the legacy teams have to be trained to adapt to the new technology and business environment or new people need to be inducted as and when necessary to support the business operations.
Processes:In the last over one decade several programmes are being conducted by government and industrial bodies to create awareness regarding importance of adopting best industry practices and automation not only in manufacturing but in all key operations. MSMEs lack the proactiveness required to adopt and change their ageold processes.
Infrastructure: In this aspect MSMEs have scored fairly in terms of investing in physical infrastructure such as state of the art machinery, in some cases even robotics and automation. What is missing is a data collection and reporting mechanism which will allow the freedom of well informed decision making for all areas of operation. I.e and integrated ERP or Information technology.
Funds: The last and the most critical reasons keeping MSMEs from being independent is the lack of financial awareness and discipline. By this we mean not just the usage of funds but also the aspect of understanding their own business in terms of costs, revenues, profitability, cash flows and its bearing on decision making.
We know that self medication is dangerous in the long term and so is the case with the DIY theory in business which most of the MSMEs adopt thinking that seeking professional help is not affordable. They miss out on a very important fact that the cost of not seeking professional help in early stages of business is more detrimental.
However, in the past 4-5 years a certain segment of MSMEs have create a revolution. These business owners have understood the importance of all the four pillars discussed above and made the necessary change in their business approach, sought professional help and have merged as the fastest growing MSMEs in the country.
The biggest financial policy change for MSMEs came with the introduction of the BSE and NSE MSME listing Platforms. A giant leap towards financial inclusion for MSMEs and a phenomenal opportunity for both investors and MSMEs to create a win-win financial scenario.
Since inception to date 385 MSMEs have been listed on the BSE SME platform and the market capitalisation of these companies is till date is Rs.54621 crores. Of these 149 companies have grown exponentially and have made it to the main board SEBI listing.
I sincerely appeal to all the MSME business owners across the nation to realise their potential to contribute to nation building and transform themselves from SMEs to large corporates. Together we can build a ecosystem for existing and future MSMEs to flourish and in the process build an Atmabirbhar Bharat that the world will admire.
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