What is a MSME?

The Government of India has enacted the Micro, Small and Medium Enterprises Development (MSMED) Act, 2006 micro, small and medium enterprises engaged in the manufacture or production, processing or preservation of goods as specified by investment. A micro enterprise is an enterprise where investment in plant and machinery does not exceed Rs. 25 lakh, a small enterprise is one where the investment is more than Rs. 25 lakh but does not exceed Rs. 5 crore and finally a medium enterprise is one where investment is more than Rs.5 crore but does not exceed Rs.10 crore.

MSMEs may be categorized into Trading, Manufacturing, or Service enterprises based on their activities. The individuals promoting each type of enterprise demonstrate distinctive characteristics. Traders are very good with numbers. Manufacturing set-ups are created by Technology enthusiasts passionate about a problem they would like to solve. Service Enterprises work with a mindset to improve the life of the target client base with their services. These enterprises experience different growth curves based on a variety of External and Internal factors. While External factors are beyond their controls, the SMEs need to work on the internal factors to ensure that they remain agile to capitalize on the growth opportunities.

Ongoing Pandemic and resultant lockdowns have hampered the economic activities globally. The cascading effect on SMEs has been distressing. Globally, more than 90% of the SMEs have been impacted. These SMEs reported Revenue Decline in the range from 20% to 90%. Adoption of Technology proved to be the critical factor for the SMEs to resume operations under restrictions.

Historically, an economic downturn of this magnitude leads to a bigger peak in the subsequent recovery cycle. The Economic Recovery has already started. Various international agencies have reported the developing economies to grow between 8 to 12% this year. This recovery will create tremendous growth opportunities for SMEs.

To prepare for the growth opportunities in the post-COVID World, all the SMEs need to:

• Assess their Current Situation realistically
• Benchmark Themselves against peers and industry standards
• Identify strategies to address their current challenges and grow

In this article, we are going to focus on the Assessment part.

Assessing the situation

We are going through unprecedented times. The MSME owners or Management has not faced such situations earlier. Hence, all the stakeholders must come together and realistically assess the status. As the situation is continuously evolving, the company also needs to calibrate the response periodically. For successful calibration, the company will need to create a baseline.

To establish this baseline, MSME Owners need to review their business in the following 3 phases:

• Pre-COVID Era
• Pandemic Period
• Unlocking Phase

SMEs need to take a comprehensive review of their business spanning across all the functional areas. The following parameters need to be covered. Click here to download the complete checklist

• Financials Aspects
  • Revenue Generated in each Phase
  • Trace changes in Receivables across the 3 phases including:
  • Costs
  • Profit
  • Cash Flow
  • Working Capital
• Operational
  • Plant / Set-up Utilization
  • Equipment Maintenance
  • Inventory
• Human Resources

Assessment of these parameters will help an Entrepreneur / Senior Management get a clear understanding of the status. Having an would be a great advantage as it would capture most of the data required for the assessment. ERPs provide preconfigured reports for Profitability, Monthly Cash Flow and Operational Efficiency. This would enable companies to conduct effective monthly reviews.

In the first of the MSME thought leadership series, we bring you three guides with downloadable checklists to prepare your business to become more agile, efficient and resilient. In the next article, we will discuss how an your enterprise can benchmark itself against the industry’s best practices.

Midsize businesses today are thinking about how their operational efficiency and agility can help them to weather future storms and seize new opportunities along the way. In fact, 33% of midsize business identify “becoming more agile and flexible” as a top five priority, according to the IDC Info Snapshot, “Business Reimagined: Driving Greater Efficiency and Resiliency,” sponsored by SAP.

Read the to discover how your business can connect, grow, and win by renewing efficiency and agility with more resilient supply chains, data-driven decision-making, and a workforce supported by intelligent systems.

The post How MSME’s Can Assess and Improve Business Efficiency appeared first on 51����India News Center.

India spends a whopping Rs. 15 lakh crore on social welfare schemes – that is nearly 1.6 per cent of its GDP and yet, a walk down the road of any urban settlement or village shows telling evidences of poverty and deprivation. Estimates suggest that only 43 per cent of this spend reaches the right beneficiary.

India has aspirations of becoming a $5 trillion economic powerhouse by 2025 but it hinges a lot on inclusive development of all its citizens. The good news is that in the new digitally charged India of today tech driven distribution methods are enabling transparency and accountability. There is a lot more that can be done.

Five factors plague India’s welfare schemes

• Absence of detailed data analysis: Many schemes suffer from poor beneficiary identification, incorrect fund allocation and lack of measurement of impact at both design stage and post disbursement. Hence, underutilization of the schemes.
• Complex application process: Applying for a welfare scheme is cumbersome and cumbersome for applicants to track status.
• Lack of awareness: The big schemes are advertised well, but there are several small schemes targeting specific groups that are not understood well.
• Information Asymmetry: Although a lot of IT interventions have been done, and schemes are on portals, due to multiplicity of platforms, citizens are not able to navigate through the schemes.
• Fraud: Many of the schemes targeted at people below the poverty line end up into the accounts of income tax payees and undeserving beneficiaries.

Towards a Progressive and Sustainable Welfare System

Many of the flagship programs of Government of India and State Governments are successful in ensuring that the benefits reach the intended beneficiary. But the risks of failure are evident because of the challenges related to identification of eligible, verified and needy beneficiaries.

We are yet to solve the pre Direct Benefit Transfer (DBT) issue that impacts majority of the social welfare programs in India. Hence, there is an urgent need for us to build technology enabled welfare ecosystem to improve last-mile delivery and accountability.

, Founder of added, “The Government welfare should be transformed from program centric to family centric. The objective of welfare should be to understand the unique need of each family and support them with minimum health, housing, education and food need. The success of welfare interventions should be measured as the number of families pushed outside the welfare net by providing them livelihood interventions”.

The long-term solution does not lie in continuously increasing welfare expenditures. Instead it lies in building a “Progressive and Sustainable Welfare System” which aims at making citizens self-reliant and less dependent on state welfare.

The 4Ds to Improve the Welfare System

SAP and approach to welfare aims at transforming welfare to progressive, proactive and family centric – through a unified platform. Data, design, discovery and delivery are the four Ds or pillars on which the welfare system rests.

Data

Demographic and economic data can help in identify target group, short term and long term benefits, potential coverage and expected impact. This will lead to better utilization of welfare budgets towards the goal of ‘Outcome based welfare’.

Design

Currently most welfare systems focus on individuals rather than families. Shifting the focus to the family as a unit may open up better possibilities to provide a holistic socio-economic growth for all. Using data analytics and AI, it is possible to customize welfare benefits keeping in mind their location, economic and social needs, and access to natural resources towards the goal of “Family Before Me”.

Discovery

On the discovery front platforms like & built-for-purpose one can address the issue. It allows citizens to quickly navigate through the hundreds of welfare schemes available and choose one that suits their needs.

Delivery

From application to approval to disbursement, the 51����EasyGov technology allows for an intuitive, easy to use seamless process that is device agnostic. Not only can citizens quickly apply but at the other end, thanks to the rule based processing system, the welfare officer can approve without the involvement of line departments and typical red tape.

Thus, 51����& Easy Gov approach this transformation by re-engineering the systems through the “Data-Design-Discovery-Delivery” process.

What’s in it for citizens

• Improved visibility & access to most relevant schemes
• Ease & convenient application process
• Reduced cost & time to apply for schemes
• Greater transparency into the schemes and tracking of application status
• Timely delivery of welfare support
• Global standards for data protection and privacy

What’s in it for Governments

• Effective Decision Making, Policy Interventions & Fund Utilization
  • Real time decision making
  • Better allocation of funds
• Optimize time & resources and drive massive transformation
  • Reduce time for roll out
  • Completely agile with data driven insights
  • Engage larger number of partners
• Enhance Visibility & Control
  • 360 degree view of any program
  • Enhanced level of alignment with the legislation priorities

India has aspirations to become a $5 trillion dollar economy in the next couple of years with eyes on the $10 trillion figure to rank among the progressive nations. It’s imperative that wastages and leakages in government expenditure be plugged, and inclusive development achieved at a fraction of current expenditure to meet these ambitious targets.

About EasyGov

EasyGov is an award-winning startup, a subsidiary of Reliance Jio Platforms focused on transformation of the welfare delivery models. In the past five years EasyGov has worked with State Governments of Haryana, Karnataka, Bihar, Tripura, Ministry of Electronics and Information Technology, Government of India, and NITI Aayog. Easy Gov is committed to help citizens in assessing the eligibility for welfare schemes, and has the ability to provide end to end service delivery. EasyGov also supports the Government in scheme design based on socio-economic profiles of families, data backed trends and preference analysis.

About the Author

Rajeev Singh is the Vice President & Business Head and recognized as the “APJ Distinguished Leader of the Year 2020”. He drives the growth for the Cloud & License Business in one of the largest segments – Oil & Gas, Utilities, Natural Resources & Public Sector.

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