For verification of this paper, please visit on http://www.socialresearchfoundation.com/remarking.php#8

The pandemic started showing its adverse effects in India in early 2020 and continued to show its negative consequences till the end of 2021. Even in 2022, its effect slowed down but was not completely gone. This has created a sense of insecurity among households and businesses in the nation. A large section of Indians belongs to the middle and lower classes of society (Thakur, 2022). India's rural and backward areas also emphasized various hardships due to the pandemic. The nation is believed to have faced a high unemployment rate due to the complete lockdown in 2020-21. With an unemployment rate of 6% in September 2020, the country experienced a high unemployment rate of 11.9% in May 2021. More than 1 crore individuals lost their jobs, the income of households and businesses got radically reduced and businesses started facing financial hardships (Khandelwal & Khandelwal, 2022). Understanding the economic distress arising out of the pandemic-initiated lockdown (Thakur, 2022), the Central Governmentcame up with a series of mega relaxations and economic reforms as a cope up strategy to fuel the economic activities and announced under Aatmanirbhar Bharat Abhiyaan (ABA) a Rs. 20 lakh crore package to implement reforms in various sectors including industry, MSME, middle class, workers, etc. The package under the scheme is equivalent to 10% of India's Gross Domestic Product (GDP). Under this package, MSMEs are not only given adequate funds but are also given priority in implementing economic revival measures (Khandelwal & Khandelwal, 2022). This article critically analyzes the impact of ABA on the advancement of MSMEs.

Dubey & Sahu (2020) observed that the government has declared AtmaNirbhar Bharat Abhiyaan, with main focus on the MSME sector. The campaign is a step in the promotion and development of MSMEs in the production activities of agricultural bases. However, it will help create more jobs and improve entrepreneurship in India.

Lal et al. (2020) stated that the government had two important motivations for implementing Atmanirbhar Bharat Abhiyaan - greater reliance on domestic products and promotion of MSMEs. This descriptive study is based on secondary data such as websites, newspaper articles, and research papers. This campaign will create more employment and improve exports, thus contributing to GDP.

Sharma & Gupta (2021) asserted that through this campaign, the government is trying to revive the economy by making the MSME sector the focus of national economic development. Through the campaign, the government also raised the voice of local for self-reliance. The study concluded that both the campaign and the special economic plan aimed at boosting local and small-scale industries in India.

Mehta & Awasthi (2021) asserted that MSMEs have an important place in ensuring the financial growth and development of the Indian economy. Over 36.1 million MSMEs contribute 6.11% of manufacturing GDP, which will boost India's exports and support economic growth.

Khandelwal & Khandelwal (2022) observed that the main vision of the self-reliance campaign lies in sustainable development, progressive self-sufficiency, and the development of MSMEs. The main agenda is the promotion of vocal for local and a greater reliance on domestic products. The campaign has paid particular attention to the MSME sector by providing skilled entrepreneurs and multiple types of credit facilities to make the sector attractive and competitive at the national and international level.

Significance of MSME Sector

MSMEs are the “backbone’’ or the economic engine of the Indian economy. MSMEs in India play an important role in reducing the regional imbalance. They provide substantial employment at a lower cost of capital than large corporations, thereby ensuring a more equitable distribution of national income and wealth (Joshi et al., 2020). MSMEs are known to contribute to the industrialization of rural and underdeveloped areas. With over 63 million MSMEs contributing around 29% to the country's GDP, the industry has huge room for growth (Rao, 2022). The reason why the government pays more attention to MSMEs can be seen in the contribution of MSMEs in realizing the dream of self-reliance.

Share in GDP  

As per the India Brand Equity Foundation report, the number of MSMEs in India has grown at a CAGR of 18.5% from 2019 to 2020 (Sood, 2020). The contribution of MSMEs to Indian GDP is expected to increase in the future with the startup boom and formalization of the economy. Facilities like the Government e-commerce marketplace (GeM) are helping small and medium-sized companies to grow (Joshi et al., 2020). As of June 25, 2021, the GeM portal has executed 6.87 million orders worth $15.67 billion. One of the biggest constraints for MSMEs has been their slow adoption of technology (Sood, 2020). But, with encouragement from the government, technology adoption can increase and MSMEs can become more competitive.

Share in Exports  

Exports are essential to any economy. For many years, the Indian economy has been operating at a trade deficit. Over the years, this trade balance has been financed by remittances and foreign investment. If India really wants to be self-reliant then it needs to increase its exports. The share of MSMEs in exports is 45%. Companies involved in exports are more profitable than those involved in serving the Indian domestic market. Therefore, exports form an important part of the government's mission to realize the dream of Atmanirbhar Bharat. The government has launched the Merchandise Export from India Scheme (MEIS). The Foreign Trade Policy (FTP) 2015-2020 is an incentive scheme to help Indian companies become more competitive and increase exports of goods manufactured or produced in India. MSMEs involved in exports are rewarded with ‘‘Tariff Credit Vouchers”. Such policy measures are expected to further increase in the coming years the share of MSMEs in exports (Joshi et al., 2020).

More Inclusive Growth

Indian MSMEs employ over 110 million people in jobs of varied nature including unskilled labor. It is well known that MSMEs create many employment opportunities at a lower cost of capital. Thus, inclusive growth can be achieved even with less capital. “Inclusive growth’’ is an important parameter of Atmanirbhar Bharat. According to government data, 13 percent of registered MSMEs provide 42 percent of jobs. Hence, there is a need to provide MSMEs with the financing they need to help them grow, as growth will quickly filter through to jobs of all kinds (Joshi et al., 2020). If India is to become a $5 trillion economy by 2025, the share of MSMEs is expected to reach 50% (Sood, 2020). Therefore, MSMEs will contribute to future growth. Furthermore, India has a very high rate of informal employment. With the formalization of the Indian economy and the high-growth MSME sector, inclusive growth can become a reality, creating jobs even in remote parts of India. India can truly realize the dream of self-employment if employment opportunities are provided in remote areas.

Self-reliance in Manufacturing Sector

One of the main aspirations of self-reliance is to make India a manufacturing powerhouse. This is what the government's 'Make in India' policy envisages. Micro, small and medium enterprises account for about 37% of manufacturing, according to government figures. If India is to increase its manufacturing output, the contribution of MSMEs is expected to be substantial. Manufacturing needs to go to market quickly and change demand in response to emerging trends. Also, it needs a marketplace to sell goods. With the growth of e-commerce and the Government e-Commerce Marketplace (GeM), the sales opportunity is enormous (Joshi et al., 2020). Additionally, emerging trends are easy to identify because the information is readily available. Manufacturing in India is showing signs of cyclical growth, with MSMEs contributing significantly (Sood, 2020). India improved its ranking in the ease of doing business and is now in 63rd place. Programs such as the ‘‘PLI scheme” are expected to increase the country's manufacturing output.

Self-reliance in Services Sector

India's services sector accounts for 55% of the economy. Just as integral to manufacturing, services play a significant role in economic growth of the India. Most informal jobs exist in the service sector, which has been hardest hit by the pandemic. In terms of MSMEs, about 33% of MSMEs in India are in the service sector, while 67% are in the manufacturing sector (Sood, 2020). Most startups are also in the service industry. MSMEs can play significantly in the service industry, providing employment opportunities for gig workers, temporary workers, unskilled workers, etc. The value of the service sector must be emphasized and prioritized if India is to become self-reliant.Amendment in the Definition of MSME

The old MSME classification was based on investment criteria for plant and machinery or equipment. Now, under ABA, the government has revised the MSME classification by inserting combined criteria for investment and annual turnover. Further, the distinction between manufacturing and services has been removed under the revised MSME definition. With its removal, there will be equality in the departments and further expansion of their functions (Khandelwal & Khandelwal, 2022). A comparison between the earlier and revised MSME classification is presented in the table below:

Enterprise	Earlier MSME classification		Revised MSME classification
	Manufacturing Sector	Service Sector	Composite Criteria for Manufacturing & Service Sector
	Investment	Investment	Investment	Annual Turnover
MICRO	< Rs.25 Lakh	< Rs.10 Lakh	< Rs.1 Crore	< Rs.5 Crore
SMALL	< Rs.5 Crore	< Rs.2 Crore	< Rs.10 Crore	< Rs.50 Crore
MEDIUM	< Rs.10 Crore	< Rs.5 Crore	< Rs.50 Crore	< Rs.250 Crore

Source: Notification issued by Ministry of Micro, Small and Medium Enterprises, Dated 1st June 2020.

Need for Suchamendment

§     To ensure smooth infusion of credit to MSMEs.

§     To improve the competitiveness of MSMEs.

§     To promote the industrialized foundation of MSMEs through upgradation in technology.

§     To support and promote the advancement of MSMEs.

§     To provide marketing support, skill development support, and entrepreneurship development training to MSMEs.

Impact of the Amendment

The amended definition of MSMEs will prove to be a boon for the sector and will bring liquidity to them. Enterprises with turnover up to Rs.100 crore and outstanding loans up to Rs.25 crore under this category will be eligible to avail of loans up to 20% of their total outstanding loan as of February 29, 2020. This liquidity will assist such enterprises to meet their working capital requirements.

Special Initiatives for Indian MSMEs

Emergency Credit Line to MSMEs

Almost all businesses and MSMEs have been adversely affected due to the COVID-19 pandemic. They need additional funds to meet operating liabilities and establish and resume their operating activities. Against such requirements, the scheme provides unsecured automatic loans with 4-year tenure without any interest cap to the extent of 20% of all outstanding credit as of February 29, 2020, to the small-scale industry without any need of security fees and new collateral securities. The government will provide a 100% principal and interest credit guarantee for banks and NBFCs. As reported by the Public Sector Bank, the credit benefits conferred under the scheme amount to Rs.206 trillion to 8 lakh borrowers, while Rs.15.8 trillion has been distributed to 4.1 million borrowers (Khandelwal & Khandelwal, 2022). This emergency line of credit has helped some 4.5 million businesses resume business operations and safeguarded the jobs of millions of people.

Debt for Stressed MSMEs

To support functioning MSMEs that have distressed assets or are under stress and need equity backing to revive their businesses, the central government will provide Rs 2,000 crore in subordinated debt (Khandelwal and Khandelwal, 2022). Subordinated debt alludes to the“debt owed to unsecured creditors that cannot be repaid until secured creditors' claims are paid in liquidation.” To implement the scheme, the government will provide support of Rs 4,000 crore to “Credit Guarantee Fund Trust for Small and Micro Enterprises”, which will provide partial credit guarantee support to banks. Finally, the bank will provide debt to the MSME sponsor to inject equity into the unit. The injection of new capital will ease the burden on MSMEs and help them recover faster. The program has benefited around 200,000 MSMEs.

Equity Infusion for MSMEs

The government announced a “Fund of Funds’’ (FoF) with a corpus of Rs. 10,000 crores to support MSMEs struggling with a severe shortage of equity. FoF was to be operated and controlled through Mother Fund and a few Daughter Funds. The fund structure will facilitate the infusion of equity in MSMEs with Rs.50,000 crore at the sub-fund level. With this funding, MSMEs can expand their scale and capacity (Khandelwal & Khandelwal, 2022). In addition, this will encourage MSMEs to list on the main board of the stock exchange.

Limiting Global Tenders

Indian MSMEs cannot withstand the unfair competitive pressure from foreign companies when government procurement goes to global tenders. This discourages domestic enterprises and MSMEs. To eliminate this unfair competition, the government decided to limit government procurement tenders of up to Rs 200 crore. This move will help domestic companies, in general, and MSMEs, in particular, and will lead to self-reliance and support the ‘‘Make in India” initiative.

Other Measures

§     Promote the replacement of trade fairs with e-commerce linkages to help MSMEs overcome marketing difficulties during the pandemic.

§     Fintech will use data generated by e-marketplaces to enhance transaction-based lending.

§     MSME receivables from government and central public sector enterprises will be paid within 45 days, to ensure liquidity in the hands of MSMEs and lead to smooth operations.

Unlocking the Next Phase of Growth

Despite all major government efforts, Indian MSMEs still face significant constraints in the era of globalization and liberalization. A country can become “self-reliant’’ if MSMEs can move forward to compete with their global partners and take advantage of international market opportunities. This is only possible if MSMEs adopt technologies more aggressively to gain a competitive advantage.

Indian MSMEs are starting to scale up the integration of new and innovative information and communication technologies such as Software as a Service (SaaS) and Infrastructure as a Service (IaaS). MSMEs in India may regularly engage external consultants or engage in other activities. Technology transfer such as vertical technology transfer or horizontal technology transfer is another option that MSMEs in India can consider.

Despite the clear benefits that technology can bring to MSMEs, this segment has not been as aggressive in undergoing digital transformation. Digital capabilities are essential if the industry is to survive the disruption and build business resilience. Digitally connected MSMEs are better able to access and capitalize on borderless markets.

For MSMEs looking to compete globally, programs such as SAP's Global Bharat program can be of great help. In addition to providing employees with digital skills, the program also provides access to B2B markets. Growing businesses need to deploy an enterprise resource planning (ERP) system as it helps improve efficiency and productivity. From automating day-to-day business processes to reducing human intervention to integrating critical business processes, ERP is extremely beneficial for MSMEs.

Some of the benefits of having an ERP system include the ability to minimize errors due to automation, view real-time inventory and gain insights from well-structured data. Cloud-based ERP offers flexibility and real-time analytics. Having real-time analytics helps make decisions faster based on the latest real-time information. As an MSME, having access to real-time information will facilitate the decision-making process while optimizing resources and costs.

MSMEs are starting to realize the advantages that ERP systems offer. India is adopting ERP solutions faster than other countries in the Asia Pacific. According to a NASSCOM study, MSMEs can contribute up to 30% of the cloud market. The study revealed that 60% of MSMEs are already using the cloud, although half are in the preliminary stages of adoption. Of course, cloud adoption has helped MSMEs reduce operating costs while increasing productivity (Sankaran, 2022).

Change is inevitable, but coping with the challenges that arise will be easier if MSMEs are prepared to deal with them. RISE with SAP brings together products for ‘‘strategic business transformation” (Thakur, 2022). This program is specifically designed for MSMEs for promoting agilityand increasing efficiency along with allowing MSMEs to maintain control of their commercial activities.

1. Dubey, P. and Sahu, K.K. (2020). MSMEs in COVID-19 crisis and India’s economic relief package: a critical review. The International Journal of Indian Psychology, 8(4): 1651-1656. 2. Joshi, V.D., Panigrahi, A., and Pitke, M. (2020). Vision of AtmaNirbhar Bharat - Role and Significance of MSME. The Management Accountant Journal, DOI: 10.33516/maj.v55i12.44-47p 3. Khandelwal, A. and Khandelwal, N. (2022). Atmanirbhar Bharat Abhiyaan- a move towards advancement of MSMEs. International Journal of Advance Research and Innovative Ideas in Education, 8(1): 215-220. 4. Lal, B.S., Sachdeva, P., Chandeliya, S., and Mittal, T. (2020). Impact of Covid-19 on micro small and medium enterprises (MSMEs): An overview. International Journal of Multidisciplinary Research and Development, 7(12): 5-12. 5. Mehta, B.S. and Awasthi, I. (2021). Surviving the Pandemic: Time to Boost the MSME Sector. IASSI Quarterly, 40(3): 589-595. 6. Rao, N.M. (2022). Impact of Atmanirbhar Bharat Abhiyaan on Small Scale Industries. Journal of Research in Business and Management, 10(12): 45-55. 7. Sankaran, P.N. (2022). Post-COVID Economic Recovery and Social Enterprises in India: An MSME Perspective. In: Social Entrepreneurs (Developments in Corporate Governance and Responsibility, Vol. 18). Crowther, D. and Quoquab, F. (Eds.). Emerald Publishing Limited, Bingley. 8. Sharma, R. and Gupta, S. (2021). Bharat towards Atmanirbharta: A Twitter-based Analysis using N-Vivo. Journal of Content, Community, and Communication, 13: 58-65. 9. Sood, P. (2020). How Can MSMEs Play A Significant Role To Achieve The Vision of Atmanirbhar Bharat? Article in Business World, July 2020. Available at: http://www.businessworld.in/article/How-Can-MSMEs-Play-A-Significant-Role-To-Achieve-The-Vision-Of-Atma-Nirbhar-Bharat-/03-07-2020-293664/# 10. Thakur, P.S. (2022). Status of MSMEs in Atmanirbhar Bharat Abhiyan. Journal of Emerging Technologies and Innovative Research, 9(7): c190-c195.