MSMEs in India's journey to Viksit Bharat

‘The micro, small and medium enterprises (MSMEs) sector is recognised as a crucial contributor to the socioeconomic development of economies.

- SHOBHA KARANDLAJE

The sector has become increasingly significant for its role in generating employment, enhancing exports, promoting industrialisation, reducing regional imbalances, and ensuring equitable income distribution. MSMEs are vital for propelling significant transitions in economies and communities.According to the World Bank, MSMEs account for around 90 per cent of formal businesses and nearly 50 percent of global employment, a trend mirrored across various emerging economies. These enterprises are engines of job creation, innovation, and inclusive growth. They play a critical role in poverty reduction, bridge regional disparities, and serve as vital links in domestic and global value chains as suppliers, distributors, and service providers. Beyond their economic footprint, MSMEs are increasingly at the forefront of creativity and problem-solving, particularly in digital technologies and green solutions.

With a vast network of over 74 million registered businesses, including 29 million women-led enterprises, generating employment for more than 320 million, the Indian MSME sector makes a substantial contribution to the growth of the country’s economy. It contributes significantly to India’s total exports, helping position the nation as a centre for global manufacturing. MSMEs, the backbone of emerging economies, act as a catalyst for driving growth and development.

With a vowed commitment to enhance ease of doing business and facilitate a pro-business environment, India has taken a strategic approach to bolster the MSME sector, while recognising its capacity as one of the key engines — alongside agriculture, investment, and exports — for India’s economic development and growth. To enhance the efficacy and inclusion of a large number of enterprises, investment and turnover limits have been raised, and a multi-pronged approach towards the holistic development of MSMEs has been adopted.