How Govt Support Is Strengthening MSMEs Connection In India The sector contributes around 30 per cent to India's GDP and accounts for nearly 45 per cent of the country's exports. They generate over 110 million jobs, offering significant employment at lower capital costs than large industries

The Micro, Small & Medium Enterprises (MSME) have been contributing significantly to the expansion of entrepreneurial endeavours through business innovations. The MSME in India are playing a crucial role by providing large employment opportunities at comparatively lower capital cost than large industries as well as through industrialization of rural & backward areas, inter alia, reducing regional imbalances, assuring more equitable distribution of national income and wealth.

Raja Debnath, managing director, Veefin Solutions Ltd. stated, "Access to financial resources remains crucial to an MSME's success. Leveraging innovative technologies can streamline lending processes, tailor financial products, and improve credit assessments, thereby expanding access to credit. As we strengthen the financial foundation of MSMEs, we pave the way for a more dynamic and resilient economy, with MSMEs at the forefront of India's growth journey"

He continued by explaining that the growth of MSMEs will continue to be pivotal in strengthening the country's economy as they contribute significantly to GDP, job creation and industrial progress. By empowering MSMEs through government schemes offering financial support, technology adoption, talent development and enhanced market access, the country is laying the groundwork for sustainable growth in this vital sector.

Anand Kumar Bajaj, founder, MD & CEO, PayNearby opines, "MSME focused government initiatives and schemes play a key role. One such scheme is the Raising and Accelerating MSME Performance (RAMP) scheme, which was allocated INR 1,170 crore in the current Union Budget. The scheme's objective is to improve the productivity and competitiveness of MSMEs by offering financial and technical assistance. This scheme will enhance the availability of capital and advanced technology, thereby fostering the expansion of MSMEs."

The allocation to the Micro and Small Enterprise-Cluster Development Programme (MSE-CDP) was more than doubled from INR 150 crore to INR 400 crore, underscoring the financial support provided for the establishment of common facility centres and the development of the requisite infrastructure among MSMEs.

As per another report by the Ministry of MSME, the sector contributes around 30 per cent to India's GDP and accounts for nearly 45 per cent of the country's exports. They generate over 110 million jobs, offering significant employment at lower capital costs than large industries.

Nilay Patel, founder and managing director, Easy Pay also aligns with the industry's thoughts that in the coming decade, MSMEs are poised to become the backbone of India's economic growth, driving innovation, employment, and GDP contributions. "With over 63 million MSMEs accounting for approximately 30 per cent of India's GDP and employing more than 110 million people, the sector's importance cannot be overstated," he said.

According to Invest India, the Indian MSME sector is on track to reach a valuation of $1 trillion by 2028, showcasing its robust growth and resilience. In FY24, manufacturing growth accelerated to 8.0 per cent, up from 4.2 per cent in FY23, according to a report by Sumpoorn, which has positively influenced sales for small businesses. This growth underscores the sector's pivotal role in driving economic performance and its ability to adapt to shifting market dynamics, solidifying its significance in India's economic framework.

Arun Poojari, co-founder & CEO of Cashinvoice stated, "The government's push for formalisation of MSMEs through the Udyam registration portal launched in July 2020 has led to increased transparency and access to government benefits. Focus on building export potential by introducing interventions such as Zero Defect Zero Effect (ZED) scheme is also key. The program encourages MSMEs to adopt high quality standards, thereby improving their competitiveness in domestic and international markets. Another scheme that has been instrumental in supporting MSMEs is the Credit Guarantee Trust Fund for Micro and Small Enterprises (CGTMSE) that facilitated easier access to credit for MSMEs, reducing their reliance on collateral - a critical component for business growth."

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Yashraj Vakil, CEO of CaptainBiz, said "The Digital India initiative is transforming the way MSMEs operate. The government has mandated digitization for MSMEs, and hence, the adoption of E-invoicing and e-way bills for easy GST compliance is crucial and mandatory. In July 2024, E-way bill generation reached a record high of 10.48 crore, highlighting that we are on the right track for digital adoption. The Indian Government has launched several initiatives to bolster the industry and ensure its robust performance in the coming decade. The Udyam Registrations hit around three crore in 2023. The Udyam portal, for instance, provides MSMEs with access to vital schemes like the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE), the Prime Minister Employment Generation Programme (PMEGP), and Raising and Accelerating MSME Performance (RAMP), the Digital MSME scheme, among others. Such initiatives are a clear indication of the government's unwavering commitment to fostering innovation and improving productivity in the MSME sector."

"We envision a future where MSMEs are not just suppliers but key contributors to the global value chain. The Technology Centers (TCs) and ZED Certification Scheme help MSMEs adopt advanced manufacturing techniques, ensuring that Indian products meet global standards. By embracing emerging trends and leveraging our unique strengths, we can unlock new opportunities and create lasting value for our stakeholders," said Shishir Gupta, CEO of Riot Labz and Oakter.

Ministry of Micro, Small & Medium Enterprises (M/o MSME) envisions a progressive MSME sector by promoting growth and development of the sector including Khadi, Village and Coir industries in-cooperation with Ministries/Departments, State Governments and other stakeholders; by providing support to existing enterprises, adopting cutting edge technologies and encouraging creation of new enterprises. A number of statutory and non-statutory bodies work under the aegis of the M/o MSME. These include the Khadi and Village Industries Commission (KVIC) and the Coir Board, besides National Small Industries Corporation (NSIC), National Institute for Micro, Small and Medium Enterprises (NIMSME) and Mahatma Gandhi Institute for Rural Industrialisation (MGIRI). Read more