PLI schemes to help India become world's most efficient economy in 5 years: Amitabh Kant

He stressed on the importance of prompt payments by large companies to MSMEs.

Backward and forward linkages with MSMEs

When a large company buys goods or services from an MSME, it creates a backward linkage. This, in turn, enables the MSME to increase its production, generate more employment, and expand its business. Similarly, when a large company sells its products to consumers, it creates a forward linkage, which can also benefit MSMEs by creating new market opportunities and increasing demand for their goods and services.

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Kant emphasised the need for large companies to supply MSMEs and promptly pay them. He said India requires more large companies and PLIs were designed to create larger firms and make India's economy more efficient in five years.

Kant stressed that these linkages between large companies and MSMEs are crucial for the growth of the Indian economy. By supporting and promoting these linkages, the government can foster an environment that encourages entrepreneurship, innovation, and job creation, which can contribute to long-term economic growth and development.

He added that India is giving itself five years to make its economy more productive and competitive than China's, emphasising the challenge that lies ahead.

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The creation of larger companies through PLIs will contribute to the growth of MSMEs, creating a more productive and efficient economy that could compete with China's, Kant added.

India's PLI scheme, which offers financial incentives to promote domestic manufacturing in key sectors such as electronics, pharmaceuticals, and automobiles, has already attracted significant investment from major companies such as Apple and Samsung.

The HSBC India SME Summit focused on finding solutions for SMEs facing challenges in the post-COVID world, and Kant's remarks highlighted the role of large companies in the growth of SMEs.