The Indian Small and Medium Enterprise (SME) sector and Indian economy are about to eyewitness significant changes as a consequence of introduction of new industrial policy by the central government. This policy is expected to be rolled out soon and it would emphasise on promotion and development of the SME sector in the best possible and fastest way to enhance the global supply chain.

Following the footsteps of the earlier industrial policies introduced in the year 1956 and 1991, the new policy will be revolutionary intervention. A draft of the new policy has already been shared with selected stalwarts of industry, economists and policy makers for their opinion and authentication of the draft.

The prediction is that the primary emphasis of the new policy will be on the development of mid-sized firms as government may aid such firms in promoting the brands.

The primary objective of promoting the SME sector is to develop and integrate technology into industrial work culture which will reinforce the economic development of SME and aid in bridging the gap amid the rich and poor sections.

The basic premise of the new industrial policy would be to create new networks amid SME to develop innovative ideas and scale them up to fruition by exploring the development prospects offered via self-help groups and startups.

The government recognized the need to include the SME section into financial flow. Accordingly, Mudra scheme is pioneered to facilitate poor people to get funding via banks and a considerable amount has been is transferred to millions of people.

As per the official records, female entrepreneurs were granted 78% of the Mudra loans and only 7% of the Mudra loans are Non-Performing Assets. As a consequence of Mudra scheme, production is increasing and employment is generated for more people.

The new industrial policy is likely to benefit the 65-70 million of Micro, Small and Medium Enterprises registered in India.

A serious implementation of the new industrial policy will certainly reinforce the SME sector and encourage small and mid-sized firms to develop new products and generate more job prospects to the unemployed – ultimately a shot in the arm for the prospect of the overall economic development of the nation.

Research inputs by Paruchuri Baswanth Mohan