Chief Guest Dr Vijayamahantesh B Danammanavar IAS, Director (MSME), DIC, GoK at World MSME Day 2024

Building a Stronger Future Together: Dr. Vijayamahantesh B Danammanavar's Vision for MSMEs

In an inspiring and comprehensive address at the celebration of World MSME Day, Dr. Vijayamahantesh B Danammanavar IAS, Director (MSME), Department of Industries and Commerce, Government of Karnataka, laid out an ambitious and strategic vision for the future of Micro, Small, and Medium Enterprises (MSMEs) in Karnataka. Speaking to a distinguished gathering of industry leaders, entrepreneurs, and dignitaries, Dr. Danammanavar emphasized the crucial role of MSMEs in driving economic growth, fostering innovation, and ensuring sustainable development.

Global Significance of MSMEs

Dr. Danammanavar began by recognizing the global importance of MSMEs, stating that these enterprises account for approximately 50% of the global GDP, represent around 90% of businesses, and contribute to 70% of employment worldwide. He highlighted the United Nations General Assembly's resolution, now in its seventh year, which acknowledges the tremendous potential of MSMEs. This resolution underscores the pivotal role these enterprises play in the global economy.

India's Economic Ambitions and the Role of MSMEs

Dr. Danammanavar detailed India's ambitious economic goals, aiming to become a $10 trillion economy by 2030. Karnataka, in alignment with this national vision, seeks to achieve a trillion-dollar economy by 2032. He affirmed that MSMEs are essential to realizing these objectives, contributing significantly to sustainable, equitable, and inclusive growth. Their role in boosting productivity, creating employment opportunities, and fostering innovation is indispensable.

Evolution of Karnataka's MSME Ecosystem

The speech highlighted the evolution of Karnataka's MSME ecosystem over the past two decades. MSMEs have been instrumental in the state's economic and social development, promoting entrepreneurship and generating large-scale employment opportunities at comparatively lower capital costs. Karnataka is home to approximately 1.5 million registered MSMEs, with micro-units making up 95% of this total and contributing to 80% of employment. MSMEs also account for around 40% of the state's tax revenues, amounting to roughly ₹48,000 crores.

Challenges and Opportunities

Dr. Danammanavar acknowledged the persistent challenges faced by MSMEs, including limited access to markets, credit, technology, and skills. He shared findings from a baseline assessment survey conducted under the Raising and Accelerating MSME Performance (RAMP) program, funded by the World Bank. The survey revealed significant obstacles, such as:

Market Access: 38% of MSMEs face challenges in accessing markets, 56% have not availed marketing support under central or state government schemes, and 63% face limited availability of business development service providers.
Credit Access: 74% face challenges in providing collateral security, 41% find the procedure cumbersome with unclear documentation requirements, and 21% consider borrowing interest rates too high. Additionally, 56% have not availed financial assistance under central schemes.
Technology Access: 47% use manual machinery for production, 50% lack capital for adopting innovative technologies, and 60% lack confidence to adopt new technologies.
Skilling: 32% lack awareness about new sector skills, 36% lack technical and soft skills, and there is limited linkage between district industry centers, industrial training institutes, sector skill councils, and industrial clusters.
Digital Ecosystem: 57% lack awareness about digital technologies, 32% lack awareness about digital marketing, and 39% use third-party websites for marketing their products.
Strategic Interventions and Support

To address these challenges, the Government of Karnataka has introduced several strategic interventions and sector-specific policies, including the Aerospace Policy 2022-2027, Karnataka EV Policy, and Coir Policy. These policies aim to promote MSMEs by providing targeted incentives and concessions.

Financial and Infrastructure Support

The Karnataka State Financial Corporation has pioneered credit provision to MSMEs under various schemes. This year, the government announced a significant initiative to reimburse MSMEs for tapping into capital markets, providing a boost to those transitioning from micro to small and small to medium enterprises. Additionally, the government has allocated funds to upgrade infrastructure in industrial areas, enhancing the overall ecosystem for MSMEs.


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