Symphony Ltd. in association with the News18 network, awarded MSMEs who are working tirelessly to foster a culture of sustainability, inclusion, and employee care at the grand finale hosted in Delhi on 20th April 2023 in the presence of Policymakers & Industry stalwarts.
Sustainability has gained significance globally in recent years, causing governments to take concrete steps to encourage MSMEs to adopt quality standards and processes. Building on the premise of sustainability, Symphony Ltd., in association with the News18 network, has launched Thinkers of Tomorrow. This unique initiative recognises the innovative efforts of MSMEs to adopt sustainable business practices. The campaign received an overwhelming response, with over 2,000 entries. Zonal winners were shortlisted from the north, south, east, and west, who then went on to compete for the grand finale, adjudged by an illustrious jury and facilitated by EY.
The finale award ceremony commenced with a welcome address by Anuj Arora, CMO, Symphony Ltd., who spoke about extreme weather conditions playing havoc on productivity and costing India 5% of its GDP.
He reported an alarming loss of nearly 160 billion potential labour hours as a result of these adverse conditions. He stressed the need to take serious cognizance of investing in ESG and its correlation to profitability.
His address was followed by a keynote by Shri B.B Swain, Secretary, Ministry of MSME, GOI, who, quoting an economic survey, shared how the GST collections from MSMEs in the current financial year are higher in comparison to the pre-pandemic years. He further stated, “As many as 14.6 lakh MSME accounts were saved from becoming NPAs during the launch of the Emergency Credit Line Guarantee Scheme”.
Mughda Kalra from the network engaged in an insightful panel discussion on Navigating the New World Order and Building a New India. Panelists comprised Vishwachetan Nadamani, COO, Ecom Express; Ashok Saigal, MD, Frontier Technologies, & Co-Chair, CII’s National MSME Council; Dinesh Gulati, COO, IndiaMART; Vinod Sharma, MD, Deki Electronics Ltd.; and Amit Kumar Group CEO & Executive Director, Symphony Limited.
Addressing the unfortunate credit gap that paralyses most MSMEs, Dinesh spoke about the lack of a formal structure among MSMEs, which prevents them from taking advantage of various government schemes and financial aid. He said, “Almost 85% of businesses are informal; they don’t have any structured balance sheets; they don’t have any structured credit payment systems; they don’t monitor how the accounts work, and that’s where they lose out”. On the other hand, commenting on the regulatory framework that challenges MSMEs, Ashok stated how the government is proactively taking steps to weed out the apprehensions amongst most MSMEs. He added that there is a 59-minute loan scheme at public sector banks; all one requires is a PAN card and GST return to avail of this service.
Busting the myth that ESG is not linked to profitability, Vishwachetan said that awareness is important, and secondly, he explained that it is easier to embed the principles of ESG in a smaller organisational setup as compared to a large organisational setup. Speaking proudly about Deki’s contribution to the energy efficiency revolution, Vinod explained how their company scaled up over the years in a zero-duty environment. He said, “Every single capacitor we sell is technically benchmarked with the best in Japan, reliably benchmarked with the best in Germany, and price-wise, it is benchmarked with the best or the cheapest in China”.
Concluding on an introspective note, Amit pointed out the gap between the decisions made in air-conditioned corporate offices and their actual translation on the field. The discussion was followed by the award ceremony.
Over the last two decades, technology has influenced every aspect of our lives, permeating every facet of society, from healthcare and education to social relationships, and personal habits to business behaviours.
While technology has overpowered every sector and function of the world of enterprise and has led to significant innovations and opportunities, it has also resulted in a digital divide. Formal businesses have embraced technology, while the large universe of informal businesses, primarily MSMEs, have been struggling to catch up on this front.
If we look at China’s SME ecosystem, it has been clocking a 10 % growth year-on-year, resulting in the addition of ~ 5 million new businesses each year. This is because they have been early adopters of digital technology and hence played a crucial role in China’s economy, contributing over 60% to its GDP and accounting for 80% of employment opportunities in the country.
Now, let us compare this with India’s small and medium business communities. India’s MSME sector is the second largest after China, with over 64 million businesses significantly contributing to the nation’s socioeconomic growth. They even help in reducing regional disparities, assuring a fairer distribution of national income and wealth by creating employment opportunities across the nation.
For many decades, MSMEs had to face many challenges related to policy and regulatory frameworks, such as complicated taxations, licensing procedures, high compliance costs and inadequate infrastructure in Tier 2,3 cities and rural areas, which inhibited them from growing and prospering further. Both, the prohibitive cost of automation and awareness of the solution have mostly limited digital adoption among MSMEs.
But thanks to the increasing affordability of smartphones, low tariff of the internet, growing use of digital media and rising awareness of online platforms like marketplaces or e-commerce are spurring the future growth for MSMEs in India. Adding to it, the enhanced digital infrastructure through government policies like GSTN, e-way bills, MSME Udyog Aadhar, NPCI, and many more are playing a vital role in democratizing business opportunities and making it easier for MSMEs to embrace digital technology.
The need for Tech enablement
Marketplaces and digital platforms on one side do serve the basic needs of MSMEs to have access to new markets, on the other side they also create access to technology such as cloud-based applications, automation, data analytics, and business intelligence which enable MSMEs to gain an in-depth insight into market trends and consumer journeys. It facilitates faster decision-making based on up-to-date, real-time information resulting in increased sales and revenues. While many MSMEs are taking advantage of going digital for local markets, it also allows them to go international by adopting borderless marketplaces, thus boosting scalability and optimizing resources and costs. These online platforms including marketplaces, e-commerce platforms and social media comprising features such as online presence through websites, rating systems, feedback mechanisms, payment tools, conversation tools and trust certificates, build credibility in the market almost immediately thus democratizing the business opportunities for them irrespective of their demographics.
Digital proficiency clearly is the need of the hour if a business wants to survive disruptions, build resiliency, and transform itself strategically. It will be even more ubiquitous in the near future. And to maximize the benefits of online platforms, all MSMEs need to do is improve their own commitment directly or provide a dedicated resource to manage online marketing, customer interactions, platform engagement, and regulatory compliance.
Leveraging Digital Infrastructure for MSMEs’ Growth
While leveraging newer technologies helps these enterprises to take advantage of opportunities in today’s changing environment, it alone will not help them to become growth accelerators for India. MSMEs face legacy issues such as inadequate and untimely credit and lack of access to finance. This is because of the lack of sufficient collateral, and low credit score that compels them to rely on unsecured loans at higher interest rates, which dents the economic viability of their businesses, and deters them from expanding and investing in new technology. It also dampens their spirits.
Therefore, the emergence of digital financial services will not only provide viable solutions to some of the challenges hindering the growth of this heterogeneous sector but will also promote financial inclusion. India’s digital commerce ecosystem is increasingly becoming interconnected and interoperable, creating a dense stack of digital infrastructure that amplifies the value of other digital services and facilitates further innovation in the space. The Indian government initiatives such as Atmanirbhar Bharat Abhiyan, allocation of Rs 15,700 crore in the Union Budget 2022-23, and extension of the ‘One District One Product’ (ODOP) scheme to cover 7,500 new products or the Udyam Registration portal and the launch of ONDC are initiatives in the direction to create a strong digital infrastructure. Similarly, marketplaces whether it is IndiaMART or GeM, are acting as catalysts to enable MSMEs and promote this sector’s growth further.
India has improved its ranking in the World Bank’s Ease of Doing Business Index, but the Indian MSME need more at the national scale. They need a more enabling legal, regulatory, and administrative environment to prosper. E-commerce platforms and online marketplaces can serve as critical intermediaries for digital financial services, integrating payment and credit services into their interfaces and aggregating detailed data on MSMEs. By doing so, they can gain insights into the risk profiles of particular groups and develop targeted financial products that cater to their unique needs. Besides, the government must accelerate its effort to assist this segment and encourage innovation of new technologies that offer more customized digital solutions and credit enablement given the complexity of the sector.
Today’s technology is gaining traction at an accelerated pace. The changes in the technology space is opening up a world of opportunities for these small businesses and is key to their growth and formalization. Digital transformation is no longer an option but a necessity in today’s fast-paced business landscape. With the right strategies in place, MSMEs can leverage technology to expand their market reach, increase efficiency, and tap into new revenue streams. As India sets its sights on becoming a $5 trillion economy by 2025, the role of MSMEs will be critical, and digitization will undoubtedly be a key enabler of their success.