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Business News/ Economy / Spending on key MSME schemes paltry

Spending on key MSME schemes paltry

The government has spent only ₹1.62 crore out of about ₹20 crore alloted for MSME Competitive Scheme

Under the MSME Innovative (Incubation) Initiative,  ₹1.52 crore was spent as of 31 December 2021, of the allocated  ₹23.16 crore. Mint Premium
Under the MSME Innovative (Incubation) Initiative, 1.52 crore was spent as of 31 December 2021, of the allocated 23.16 crore. Mint 

NEW DELHI : The Union government’s expenditure on several schemes focused on small businesses has been meagre so far in FY22, according to the annual report of the micro, small, and medium enterprises (MSMEs) ministry. This is despite MSMEs being a focus area for the government in the past couple of years given the severe impact of the pandemic.

The government had to this effect also rolled out the Emergency Credit Line Guarantee Scheme in 2020 to support pandemic-hit businesses with the primary focus on MSMEs, with initial corpus of 3 trillion that has been increased to 5 trillion. The Centre had in 2020, during the first wave of the covid-19 pandemic, rolled out a slew of initiatives and also launched the UDYAM portal for registration of MSMEs.

One of these is the MSME Champions Initiative, which is a combination of three schemes aimed at boosting competitiveness and innovation and providing Zero Defect Zero Effect, or ZED, certification. However, there has been significant shortfall in expenditure in this.

The government has spent only 1.62 crore out of the nearly 20 crore allocated for the MSME Competitive Scheme aimed at enhancing competitiveness of these businesses, acc-ording to the ministry’s annual report for the financial year 2022.

Another key scheme under the Champions Initiative is the MSME Sustainable (ZED) Certification aimed at creating awareness among MSMEs about “Zero Defect Zero Effect" practices and motivating and incentivizing them for ZED certification.  As much as 16 crore was allocated for this scheme for FY22, but nothing was spent as of December-end owing to “redesigning of the scheme", said the report.

The expenditure on the MSME Competitive (Lean) Scheme, meant to enhance competitiveness of manufacturing MSMEs through implementation of lean tools and techniques, has been just 8% of the 19.43 crore allocated for the fiscal year, according to the report. The scheme has so far been implemented in 182 clusters of MSMEs leading to waste reduction of 5-10%, the report said.

The MSME Innovative Scheme constitutes three sub-schemes dedicated to incubation, design, and intellectual property rights (IPR). Under the MSME Innovative (Incubation) Initiative, 1.52 crore was spent as of 31 December 2021, out of the allocation of 23.16 crore. The expenditure on design support was 2.36 crore out of the earmarked funds of 15.21 crore. Only 14 lakh was spent on IPR till the end of December out of the allocation of 25.57 crore.

The situation with regard to the Entrepreneurship and Skill Development Programme (ESDP) is similar.  The government has completed 315 programmes and reached out to 15,599 beneficiaries as of 31 December 2021 but has spent only 1.83 crore, out of the allocated 10 crore for the current fiscal.

Queries emailed to a spokesperson of the MSME ministry on 18 February remained unanswered until press time.

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Rituraj Baruah
Rituraj Baruah is a senior correspondent at Mint, reporting on housing, urban affairs, small businesses and energy. He has reported on diverse sectors over the last six years including, commodities and stocks market, insolvency and real estate. He has previous stints at Cogencis Information Services, Indo-Asian News Service (IANS) and Inc42.
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Updated: 21 Feb 2022, 01:40 AM IST
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