Major issues affecting SME sector in India
1.Unregistered: 95% of enterprises in SME sector are unregistered.This implies that these enterprises are outside the scope of schemes and policies of Government. Udyog Aadhar scheme is a major initiative and may help enterprises become part of the formal system
2.Unorganized nature: This results in lack of marketing support at the national and international level
3.Lack of trust between firm and government
4.The issue of credit flow to the sector: The RBI has adopted the recommendations of Pm’s task force on MSMEs in 2010, but the implementation of these by banks and benefits to the individual firms are seen as major challenges that are seen on the ground
Over the next few decades, a critical factor in making India competitive will be making MSMEs competitive. It will happen only when the government and firms resolve some of the issues mentioned here. A process is driven and systematic approach to bridging the trust deficit will help MSME become more competitive.