The micro, small and medium enterprises (MSMEs) are often known as the backbone of the Indian economy. This sector contributes more than 29% to the GDP and is responsible for around 50% country’s total exports. MSMEs also contribute one-third of India’s manufacturing output and employ people living in semi-urban and rural areas.
The MSME sector has been a significant source of employment in India. Today, it is estimated that there are 63 million MSMEs across the country. As of December 4, 2023, the Udyam Registration Portal recorded 3.16 crore MSME registrations since its inception on July 1, 2020. Furthermore, the total employment documented on the portal as of December 6, 2023, reached 15.50 crore.
MSMEs help the economy by not only creating jobs but also lowering production costs, increasing purchasing power, and providing convenience. The government encourages micro-enterprises, especially in low-income areas. It helps the business and economy grow.
According to the latest information published by the Ministry of Statistics & Programme Implementation, the share of MSME Gross Value Added (GVA) in all of India’s Gross Domestic Product (GDP) and the share of MSME manufacturing GVA in all of India Manufacturing GVA are as follows:
| Year | Share of MSME manufacturing GVA | All India Manufacturing GVA |
| 2019-20 | 30.48% | 40.67% |
| 2020-21 | 27.24% | 40.30% |
| 2021-22 | 29.15% | 40.83% |
As per the information culled out from the Data Dissemination Portal of the Directorate General of Commercial Intelligence and Statistics (DGCIS), the share of export of MSME specified products in all India exports are as follows:
| Year | % share of Export of MSME related products in All India Export |
| 2019-20 | 49.77% |
| 2020-21 | 49.35% |
| 2021-22 2022-23 | 45.03% 43.59% |
| 2023-24(upto September 2023) | 45.56% |
The information provided above was given by the Minister of State for Micro Small and Medium Enterprises, Shri Bhanu Pratap Singh Verma in a written reply to the Rajya Sabha on December 11, 2023.
Contemplating the role of this sector in Employment generation, promotion of entrepreneurship, regional development, export promotion, innovation, reduction of income disparities, and support for large industries, the Government of India and the Reserve Bank of India launched the following initiatives.
Related posts on the Role of the Priority Sector and MSME in the Indian Economy
The below schemes help businesses in the MSME sector and are expected to contribute largely to India’s economic growth.
| Prime Minister’s Employment Generation Programme (PMEGP) | Trade Receivable Discounting System (TReDS) |
| Pradhan Mantri Mudra Yojna (PMMY) | Emergency Credit Line Guarantee Scheme (ECLGS) |
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