Bridging the Gap: Challenges in Reaching MSMEs with Government Skill Initiatives

Government skill and talent initiatives struggle to impact MSMEs, with 71% of small firms reporting little benefit from programs. Despite significant infrastructure investment, gaps in logistics, workforce productivity, and high costs threaten long-term competitiveness of India's manufacturing sector, according to a report by Cushman & Wakefield.

Recent findings from a Cushman & Wakefield report reveal that government skill initiatives are failing to make a significant impact on Micro, Small, and Medium Enterprises (MSMEs) in India's manufacturing sector. A staggering 71% of small firms reported negligible benefits from government-run skill-training programs.

Although MSMEs employ a substantial portion of the manufacturing workforce, their output lags compared to similar firms in emerging and advanced economies. The government's substantial investment in infrastructure, including Rs 2,500 crore for plug-and-play parks, aims to boost efficiency and foreign investments.

These initiatives have led to improved operational efficiency and profitability, with 93% of respondents affirming such benefits. However, challenges such as high logistics costs, limited warehousing, and skill gaps continue to impede growth in the MSME sector, highlighting critical areas for future policy focus.

(With inputs from agencies.)