By Dr Arunabha Ghosh, CEO, CEEW
” More than half of the INR 5.8 lakh crore stimulus outlay announced today focused on our mammoth MSME sector. As many as 40% of India’s total 450 million informal workers are employed with MSMEs. The recovery of this sector is central to our economic resurgence and the well-being of the workers. The stimulus today addressed both the demand and supply side constraints for MSMEs. The systemic focus on generating a larger market for this sector through local procurement and virtual market linkages are leaps in the right direction. This is especially critical as public procurement is likely to see a huge boost in the coming months. In order to meet this demand, a suite of financial and regulatory measures have also been offered.
The MSME sector is also the backbone of India’s energy transition, and a key source of industrial emissions. Having access to capital will allow this sector to accelerate manufacturing, but in a manner that could potentially improve energy efficiency and trigger the switch to cleaner fuels. CEEW research across hundreds of MSMEs has found that access to capital and larger markets could help MSMEs move to more efficient machinery and appliances as the unit economics of the energy transition become increasingly compelling from a competitiveness point of view.”