Challenges in scaling up and regulatory hurdles for MSMEs - NITI Aayog CEO

A few days ago, NITI Aayog Chief Executive Officer BVR Subrahmanyam launched new initiatives for MSMEs.

- Kishore Kumar Biswas

He stated that the sector is heavily impacted by regulations, with technology upgrades and skill development being key challenges. He reportedly said, "Sometimes when I think of the Indian economy, I worry. We have a large number of large companies. The number of medium-sized companies is smaller than the large companies. Then, where is the growth going to come from? It is an institutional, structural problem."

The Number of Small, Micro, and Medium Enterprises

A significant number of production units remain unregistered, particularly among micro enterprises. Many micro-units are too small to justify registration, while others are unaware of the process or do not find it beneficial. Some previously registered units have not maintained their status over time. In fact, most micro-enterprises are so small that their average employment capacity is fewer than two workers.

Udyam is the only government portal for MSME registration. According to the latest data (Indian Express, 28th March 2025), India has approximately 6.18 crore MSMEs, comprising 6.09 crore micro, 7.44 lakh small, and 70,000 medium enterprises.

Definition of Micro, Small, and Medium Enterprises

The Udyam portal classifies MSMEs based on the 2020 definition. Under this framework: