Updated January 28th, 2024 at 17:10 IST
Industry body bats for comprehensive measures to strengthen MSMEs and propel India's service sector
The MSME sector, vital to India's economy, has evolved into a dynamic force with around 30% contribution to GDP (as of 2021-22) and over 45% in exports.
- 2 min read
Boost to MSME sector: As India looks ahead to the Union Budget 2024-25, the PHD Chamber of Commerce and Industry presents a compelling set of recommendations aimed at fortifying the Micro, Small and Medium Enterprises (MSMEs) sector and providing a substantial boost to the dynamic service sector.
Strengthen the Micro, Small and Medium Enterprises
The MSME sector, a vital contributor to India's economy, has evolved into a dynamic force with around 30 per cent contribution to GDP (as of 2021-22) and over 45 per cent in exports (up to September 2023). The PHD Chamber applauds the reforms undertaken for MSMEs and suggests further measures to enhance their value chains, structural competency, and overall efficiency. A key focus is on addressing the financial challenges faced by MSMEs by streamlining loan disbursements, ensuring affordable interest rates, and enhancing liquidity. The goal is to empower MSMEs, fostering their growth and strengthening their role in manufacturing, employment generation, and the country's export growth.
India’s service sector overview
With the services sector contributing over 50 per cent to India's GDP, it plays a pivotal role in the country's economic landscape. The service sector has shown resilience, with services exports registering a year-on-year growth of 6.5 per cent in November 2023. The PHD Chamber advocates strategic measures to further elevate the service sector's capabilities.
- Digital Infrastructure and Literacy: Significant emphasis should be placed on enhancing digital infrastructure and promoting digital literacy to facilitate smoother service delivery.
- Skill Development: Increasing investments in skill development programs tailored to industry demands will help bridge the existing skill gap.
- Export Facilitation: Simplified regulatory processes and financial incentives can facilitate the export of services, expanding India's global market presence.
- Research and Innovation: Prioritising research and innovation through dedicated funding and public-private partnerships will foster a culture of innovation and technological advancement.
Artificial Intelligence in the service sector
The use of Artificial Intelligence (AI) is transforming the service industry, automating tasks, processing extensive data, and enhancing customer satisfaction. The PHD Chamber recommends prioritising key initiatives in the Union Budget to stimulate the growth of the AI sector. This includes investing in AI education and skill development programs, and allocating resources for the development of robust AI infrastructure, ensuring India's competitiveness in AI-driven solutions across the service sector.
Published January 28th, 2024 at 17:10 IST