One of the thrust areas for increasing the competitiveness of MSMEs includes skills development. Skills development not only helps in improving productivity but also fosters entrepreneurship. Hence, it is imperative for the concerned governmental agencies, trade associations and MSMEs to come together and discuss on how to make training programmers relevant and attractive for MSMEs. The lack of human resources has been a long-standing problem faced by MSMEs in the country. Despite India’s large pool of human resources, the MSMEs continue to lack skilled manpower required for manufacturing, marketing, servicing, etc.

1. Skills Development of the
MSME Sector
Part 7
Empowering MSMEs Role of Banks & Financial
Institutions, IT, Skill Development & Rating Agencies

2. Skills Development of the MSME
Sector
One of the thrust areas for increasing the competitiveness of MSMEs includes
skills development. Skills development not only helps in improving
productivity but also fosters entrepreneurship. Hence, it is imperative for the
concerned governmental agencies, trade associations and MSMEs to come
together and discuss on how to make training programmers relevant and
attractive for MSMEs. The lack of human resources has been a long-standing
problem faced by MSMEs in the country. Despite India’s large pool of human
resources, the MSMEs continue to lack skilled manpower required for
manufacturing, marketing, servicing, etc.

3. Skills Development of the MSME
Sector
Majority of the graduates passing out each face difficulties in getting
employed in MSMEs due to the lack of job / role specific skills. Also, it has
never been easy for MSMEs to hire the right workers at affordable prices.
Another area of concern is low focus of MSMEs on skills development. Even
though MSMEs are investing in infrastructure, technology and manufacturing
practices, development of skilled manpower still remains a major concern.
There is evidence that suggests that MSMEs that have invested in skill
development have witnessed better business performance. Skill development
programs with a blend of industrial engineering, quality management, general
management and soft skills can enable the MSMEs to reach the next level of
growth.

4. Importance
• To inculcate entrepreneurial qualities among the youth.
• To retrace the high growth path, the MSME sector assumes a pivotal role in
driving the growth engine. The MSME sector in India continues to demonstrate
remarkable resilience in the face of global and domestic economic
circumstances.
• The sector has sustained an annual growth rate of over 10% for the past few
years.
• The sector has shown admirable innovativeness and adaptability to survive
economic shocks, even of the gravest nature.

5. Importance
• Calibre for employment generation, low capital and technology
requirement, promotion of industrial development in rural areas, use of
traditional or inherited skill, use of local resources, mobilization of resources
and exportability of products.
• Generates around 100 million jobs through over 46 million units situated
throughout the geographical expanse of the country. With 38% contribution
to the nation’s GDP and 40% and 45% share of the overall exports and
manufacturing output, respectively, it is easy to comprehend the salience of
the role they play in social and economic restructuring of India .

6. Skill development of entrepreneurs
in MSME sector
Initiatives for MSME skill development
1. National Policy on Skill Development 2009
In the last five years India has made progress towards developing the assets
to drive skill training at scale. National Skill Development Corporation 2009
ensured the training programmes and courses for the same.
2. National Skill Qualification Framework 2013
It is anchored at NSDA and efforts have been initiated to align skilling and
education outcome.

7. Skill development of entrepreneurs
in MSME sector
3. Sector Skill council
This ensures that the skill development efforts begin made by all stalk holders
in the system are accordance with the actual needs of industry.
4. Skill India' mission through the Pradhan Mantri Kaushal Vikas Yojana will
help increase the availability of a skilled workforce in the MSME sector.
Includes the following ten major directions to achieve the objective set
• Aspiration
•Capacity
•Quality
•Synergy
•Mobilization and engagement

8. Skill development of entrepreneurs
in MSME sector
• Global Partnership
• Outreach and advocacy
• ICT Enablement
• Development of trainers
• Inclusivity

9. Skill development of entrepreneurs
in MSME sector
5. The National Policy on Skill Development and Entrepreneurship, 2015
The objective of the National Policy on Skill Development and
Entrepreneurship, 2015 will be to meet the challenge of skilling at scale with
speed and standard (quality). It will aim to provide an umbrella framework to
all skilling activities being carried out within the country, to align them to
common standards and link the skilling with demand centres. In addition to
laying down the objectives and expected outcomes, the effort will also be to
identify the various institutional frameworks which can act as the vehicle to
reach the expected outcomes. The national policy will also provide clarity and
coherence on how skill development efforts across the country can be aligned
within the existing institutional arrangements. This policy will link skills
development to improved employability and productivity.

10. Skill development of entrepreneurs
in MSME sector
6. Start-up India Action plan :
Ease of doing business, taxation, access to capital for MSMEs and skilling.
7. Employee Pension Scheme
CRISIL believes the government's proposal to pay the Employee Pension
Scheme contribution of 8.33 per cent for all new employees enrolling in the
Employees' Provident Fund Organisation for the first three years of their
employment is a big incentive for MSMEs.

11. Skill development of entrepreneurs
in MSME sector
8. Enterprise and skill development:
Entrepreneurship /skill development programmes launched by the Ministry is
one of the key elements for promotion of MSEs (Micro and Small Enterprises)
particularly for the first generation entrepreneurs.
The Entrepreneurship Development Programmes (EDPs) are conducted
through MSME-DIs (Development Institutes), which focus on improving
entrepreneurial skills and developing industry specific skills in areas such as
electronics, electrical, food processing, etc. to develop and enhance the skill
of the entrepreneurs.

12. Skill development of entrepreneurs
in MSME sector
9. MSE - Cluster Development Programme (CDP)
The implementation of MSE-CDP is for the holistic development of selected
MSEs clusters through value chain and supply chain management. The
Ministry has adopted a cluster development approach as the key strategy for
enhancing the productivity and competitiveness as well as capacity building
of Micro and Small Enterprises (MSEs) and their collectives in the country.
Clustering of units also enables providers of various services, including banks
and credit agencies to provide their services more economically, thus
reducing costs and improving the availability of services for these clusters.

13. Skill development of entrepreneurs
in MSME sector
10. National Competitiveness Programme (NMCP) Schemes
The Ministry announced the formulation of National Competitiveness
Programme (NMCP) in 2005 with the objective to support the Small and
Medium Enterprises (SMEs) in their endeavour to become competitive and
attune themselves to the competitive pressure caused by liberalization..

14. THANK YOU
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