Certain recommendations were given by the Task Force on Indian Micro, Small and Medium Enterprises (MSMEs). They include encouraging the Microfinance Institutions (MFIs) for forming self-help groups and extension of the ‘stimulus package’ for a further period of one year. The task force was started for highlighting the concerns and issues regarding MSMEs. Several measures are included by the force for increasing the MSMEs in the country.
The MSME sector involves entrepreneurship which includes individual creativity and innovation. The sector contributes for 8% of the country’s GDP, 45 percent of the manufactured output, and 40 percent of the exports of the country. An employment was given for about 60million persons by 26 million enterprises in the MSME sector. It was reported that the overall growth and the labor to capital ratio in the MSME sector was higher than in the large industries.
It was also reported that more than 94 percent of MSMEs are unregistered. Many of them were established in the informal or unorganized sector. This recommends development of the sector. The task force recommended to increase the public spending in the range of Rs. 5,000-5,500 crore for the next next three to five years. It also recommended the stipulated lending targets by the commercial banks for micro enterprises.
The establishment of a Small and Medium Enterprise (SME) Exchange was encouraged by the task force for simplifying labor laws in the sector for the next three years. The task force also recommended to set up an independent body for promotion and development of the sector.