MSME Day: Indian MSMEs Rely Too Much On Jugaad?

The word “jugaad” is defined as ‘a flexible approach to problem-solving that innovatively uses limited resources.’ The word was added in the Oxford English Dictionary abbreviated as OED in its 2016 update. If we talk about Small and Medium business then the word is also meant as a business philosophy. Just as the invention of 0 gave us the potential to think huge numbers in the same way “jugaad” gave economists and businessmen the proficiency to achieve those numbers. Today 27, June 2020 i.e on International MSME day we pose a question, do Indian small businesses rely too much on Jugaad?

world msme day

In its 74th plenary session on April 6, 2017, the United Nations General Assembly declared June 27th to be MSME day and recognized the importance of micro, small and medium-sized enterprises for achieving sustainable development goals and promotion from innovation, creativity and sustainable work for everyone. Now the question arises if the SMBs have utilized “jugaad” too much that it has become the fragility for such businesses and whether it can ensure continuous growth? For a very long time, the Indian MSMEs referred “jugaad” economic in a lot of procedures, but if a business is going for cheaper options, it is not always in their self-interest. The word perhaps has outlasted its value and now the MSMEs use it as an excuse to work around problems, going for short-cuts for small-term profits. It has been stopped being a strategic approach for businesses to ensure long term growth. On this very MSME Day, BusinessRights appreciated the ingenious spirit of MSMEs and also advised them to look beyond ONLY “jugaad” and uplift them to adopt a more structured approach. It’s not possible to deliver standard and high-quality products and services to thousands of clients only by “jugaad”. To ensure good service your business must have a perfect mix of important market detail, use of tried and tested management concept, adherence to statutory compliance, a multi-avenue to counter financial crunch, and yes, the adoption of the latest technology. 

According to a 10 year study period, it has been noticed that the number of MSMEs has been shrinking by 40% in India. It is because of the strategies carried out in a company’s everyday functioning and here the MSMEs rely too much on jugaad which is the main reason that the MSMEs are unable to ensure financial growth and expediency. To get rid of such a situation, the companies require combined responses from the MSME community as well as the administration. The Indian MSMEs are given their sheer size to spread and strengthen the plan of inclusive and sustainable infrastructure development, playing a significant role. Though the MSMEs provide new jobs, they have to face numerous challenges in day-to-day operations. To leverage government help, it first must come under the regulatory and apex bodies. This call is for shunning the jugaad strategy. The most important thing the MSMEs have to do is to change their method of thinking and implementation. This can happen only if the MSMEs become eligible for using different sorts of financial tools and tools for helping their business in the online platform, which can help them to get easy access to finance and their target audience. It is, therefore, important to take a structured approach and abandoning overdependence on jugaad. With a powerful strategic plan, you can easily come out of such circumstances where you no longer need to jugaad. 

India is changing every day under this new administration. The economic growth of India can be fully exploited only by ensuring the expansion of the private sector of which 40% belongs to these MSMEs. It has been estimated that within the next 5 years, it will be out of the question to evade necessary norms and MSMEs can even be forced to adhere to the rules. So, never wait for a day where you can be pointed out to depend much on jugaad. Therefore, make sure that your business is processed and system driven.

BusinessRights have been supporting small businesses since our inception, on MSME day we humbly ask people to support small local businesses. Know more about SMEs here.

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