Editorials/Opinions Analysis For UPSC 27 June 2022
Contents
- Bringing MSMEs into Global Value Chains
- How Hanoi and New Delhi are fortifying defense ties
Bringing MSMEs into Global Value Chains
Context
Every year on June 27, World MSME Day provides us with the opportunity to appreciate their valuable contribution to job creation and sustainable development across the world.
Relevance
GS III: Indian Economy and issues relating to Planning, Mobilization of Resources, Growth, Development and Employment, Inclusive Growth
Dimensions of the Article
- MSMEs & Their Importance In Indian Economy
- Challenges Before MSMEs
- Meeting Standards
- Environmental Impact
- Job creation
- GST Major Shortcoming: Multiple Rates
- Way Forward
MSMEs & Their Importance In Indian Economy
Though the growth and achievements of large businesses in India have received much attention, micro-, small and medium enterprises (MSME) actually account for over 99% of businesses. MSMEs are the largest employer in India outside of agriculture, employing over 11.1 crore people, or 45% of all workers. Despite the immense contibution, MSMEs confront several challenges over the last few years.
Challenges Before MSMEs
- The disruption of the pandemic severely impacted MSMEs, especially those in the services sector.
- Their small size and lack of access to resources meant that many were only beginning to mount a fragile recovery just when renewed war, supply shocks and soaring fuel, food and fertilizer prices presented a host of new threats.
- And all of this comes against the backdrop of the ongoing climate crisis, the greatest disruption multiplier of all.
However, the potential of India’s small businesses is truly immense.
- India faces a unique moment in history, a potential demographic dividend of tremendous proportions.To leverage this opportunity, India needs to create many jobs, especially for the one million young people entering the labour market every month.
Meeting Standards
While some MSMEs operate at the highest industry standards, most do not meet today’s standards on productivity, environmental sustainability, and health and safety of workers.
- This is further aggravated by the higher degree of informality in the sector, lacking awareness of and commitment to comply with labour and environmental laws.
- Consequently, informal enterprises cannot avail formal MSME schemes nor participate in standardised global value chains.
- The GoI has rightly prioritised the development of the country’s MSME ecosystem for achieving Atma Nirbhar Bharat, Make in India aspirations.
- Initiatives such as the production linked incentives (PLI) schemes and the recently launched zero effect zero defect (ZED) certification are helping to promote and boost the sector.
- To help accelerate this process, the UN system in India is supporting MSME development initiatives and working with MSMEs as they navigate dynamic post-pandemic economic landscape shaped by transitions, chiefly digitalisation, greening and the reorganisation of value chains.
- Firstly, digitalisation concerns the integration of digital technologies, such as big data, artificial intelligence and virtual reality, in business processes, also known as Industry 4. Largely, the digitalisation in smart manufacturing operations is still in its infancy.
- Therefore, there is a need for replicable digital solutions adapted for MSMEs, including digital enhancements for machinery and equipment currently in use.
- Government initiatives such as the Digital Saksham and the interlinking of the Udyam, e-Shram, National Career Service (NCS), and Atmanirbhar Skilled Employee-Employer Mapping (ASEEM) portals show the promise of targeted digitalisation schemes.
Environmental Impact
- Secondly, “greening” reduces the environmental impact of MSME operations and fosters cleantech innovation and entrepreneurship to accelerate the transition to a circular and low carbon economy.
- Energy efficiency provides a case in point as business and climate benefits go hand in hand. For example, together with the Bureau of Energy Efficiency (BEE), UNIDO provided energy efficiency advisory services to 695 MSMEs
- As a result, these MSMEs invested themselves during the cash-strapped COVID period ₹157 crore to save 13,105 tonnes of oil equivalent and ₹81 crore in annual operating costs and preventing 83,000 tonnes of greenhouse gas emissions.
- Thirdly, to increase the resilience of supply in response to recent shocks, production locations for global value chains are increasingly shifting and diversifying across countries and regions.
- To further leverage this opportunity, UNIDO is spearheading the notion of manufacturing excellence. This means fostering a culture of continuous improvement and innovation that reduces waste and increases productivity, safety and quality.
Job creation
- The Prime Minister’s Employment Generation Programme (PMEGP) is also creating opportunities for self-employment and micro enterprises, with over 7 lakh micro enteprises assisted in becoming economically viable.
- Similarly, ILO, together with the FICCI and corporates, is supporting MSMEs in creating and retaining jobs alongwith integration into global supply chains.
Way Forward
A forward-looking, wholesome mindset centres on policy makers and society at large fully recognizing and supporting the crucial socio-economic role that MSMEs play in India, as across the world. In turn, to fully unlock emerging opportunities, MSME owners need to further commit to formalizing their businesses, investing in improved productivity, compliance and most of all, decent work and jobs for India’s aspiring youth. As UN Secretary-General Guterres has urged, “Let us renew our commitment to leverage the full potential of MSMEs, rescue the SDGs and build a more prosperous and just world for all.”
Source – The Hindu
How Hanoi and New Delhi Are Fortifying Defense Ties
Context
The furtherance of India’s Act East Policy, maritime multilateralism, maritime security outreach and the building of stronger networks across the Indo-Pacific are some of the key elements which have made New Delhi and Hanoi natural partners. The two countries recently deepened bilateral cooperation with the signing of the Joint Vision Statement on India-Vietnam Defence Partnership towards 2030 during the recent visit of Defence Minister to Vietnam.
Relevance
GS II: India and its Neighbourhood.
Dimensions of the Article
- India and Vietnam: Latest Developments
- India-Vietnam Cooperation
- New Delhi stood for Vietnam
- Way Forward
India and Vietnam: Latest Developments
- In the meeting with his counterpart, Vietnam’s Minister of National Defence General Phan Van Giang, the early finalisation of the $500 million Defence Line of Credit extended by India to the latter along with the implementation of existing projects which would complement India’s ‘Make in India, Make for the world’ and Hanoi’s defence capabilities were also discussed.
- The two sides also signed a Memorandum of Understanding (MoU) on Mutual Logistics Support.
- This is the first agreement of its kind that Hanoi has entered into with any other country and elevates the standing of Comprehensive Strategic Partnership (CSP) which Hanoi shares with New Delhi since 2016 (along with only Russia and China).
India – Vietnam Cooperation
- Strategic Partnership: India and Vietnam agreed to strengthen their strategic partnership “in line with India’s Indo-Pacific Oceans Initiative (IPOI) and the ASEAN’s Outlook on Indo-Pacific to achieve shared security, prosperity and growth for all in the region”
- Economic Cooperation: During the Financial Year (FY) April 2020 – March 2021, bilateral trade between India and Vietnam reached USD 11.12 billion. Indian exports to Vietnam amounting to USD 4.99 billion and Indian import from Vietnam at USD 6.12 billion.
- Defence Cooperation has been growing steadily following the singing of the Defence Protocol in 2000 and covers extensive navy-to-navy cooperation spanning the exchange of intelligence, production and logistical support for Vietnam’s defence requirements, development of naval facilities such as Nha Trang, defence dialogues, high-level visits and the supply of warships and cruise missiles.The year 2022 marks fifty years of diplomatic relations between the two countries.
- Maritime Cooperation: Because of the volume of maritime trade, energy reserves in Indo Pacific region, maritime cooperation between countries in the region have expanded exponentially.
- Both countries find convergence in their approaches towards the maintenance of stability and security of the Indo-Pacific which has translated into diplomatic and political support in the context of developments within the region.
- The enhanced geostrategic prominence and uncertainties vis-à-vis China’s expanding and often abrasive footprints in the Indo-Pacific have resulted in emphasis on cooperative mechanisms.
- Vietnam has and continues to be one of the most vocal countries with respect to China’s periodic transgressions in the South China Sea.
- In India, Vietnam has found an equally uncompromising partner when it comes to the question of violations of freedom of navigation and threats to sovereign maritime territorial rights as enshrined under international maritime law.
- Indeed, it is believed that Hanoi used the term Indo-Pacific for the first time in 2018 in its Joint statement with India.
New Delhi Stood For Vietnam
- New Delhi has supported Vietnam’s position in the South China Sea with respect to Beijing’s destabilising actions and coercive tactics backing the verdict of the Permanent Court of Arbitration in the case brought by Manila in 2016 and reiterating the irrefutability
- India has also not backed down from continuing ONGC Videsh Ltd (OVL)’s oil exploration project in Block 128 (which is within Hanoi’s EEZ) despite China’s protests.
- In 2020 China’s incursion into Ladakh was quickly followed by the deployment of warships by India to the South China Sea in an instance of asymmetrical warfare and a signalling that India will not stand down.
Way Forward
The cordial bilateral relations together with the deepening of India’s operational outreach in the Indo-Pacific have successfully indicated and cemented its role as a capable, willing and reliable partner. Despite the fact that the China factor has provided impetus to the solidification of ties, it is also important to consider that mutual cooperation is not driven solely by it. Both countries have expanded areas of collaboration and are supportive of each other’s individual and multilateral involvements within the rubric of the Indo-Pacific.
Source – The Hindu
