Micro, small and medium enterprises (MSMEs) form the vibrant foundation of India's economic framework, serving as catalysts for innovation, employment generation and inclusive advancement. Defined by the Ministry of MSMEs based on investment ceilings across manufacturing and services, MSMEs comprise over 63 million units spread across rural belts and urban clusters.

 

Micro enterprises with up to Rs 1 crore investment in manufacturing and Rs 10 lakhs in services constitute India's grassroot economic activity. While modest in scale, millions of these units engage localized skills to provide livelihoods and meet niche market needs.

Small enterprises ranging from Rs 1-10 crore investment in manufacturing and Rs 10 lakh - Rs 2 crore in services exhibit promising scalability and resilience, with growing numbers embracing advanced technologies and management practices.

Medium enterprises mark more significant capacities and market presence, with Rs 10-50 crore investment in manufacturing and Rs 2-5 crore in services. Their contributions to output, exports and employment underline their strategic value.

Cumulatively, MSMEs engage over 120 million people across urban factories and rural artisanal units, emerging as India's second largest employer after agriculture. They account for thirty per cent of the Indian GDP and over forty-five per cent of manufacturing output while contributing to over forty per cent of merchandise exports with their production capacities. However, these enterprises have relatively low penetration in high value-added sectors like electronics, medical devices and aviation components, warranting policy nudges.

During COVID-19, the resilience and adaptability of MSMEs came to the fore, as small bakeries evolved into suppliers of bread and buns to large stores, and garment factories pivoted to masks and protective supplies. But the pandemic also highlighted lingering challenges facing MSMEs in accessing timely credit, deploying advanced technologies, enhancing management acumen, securing market access and availability of skilled manpower.

Cognizant of their strategic economic value and livelihood linkage, Government initiatives are focused on strengthening MSME capacities. As part of easing access to formal credit, the Rs 3 lakh crore Emergency Credit Line Guarantee Scheme was launched, with Rs 2.73 lakh crore already extended to 13 million MSME accounts. The comprehensive Udyam Registration portal has also facilitated over 1 crore MSME recognitions through seamless processes. Skilling has received focused attention via dedicated Skill Councils aligned to key MSME sectors like food processing, capital goods and textiles. Global access is also being enabled by integrating MSMEs into the Open Network for Digital Commerce.

Industry associations like CII and FICCI are significantly contributing through large-scale mentoring programs connecting small enterprises with larger companies. The SIDBI Make in India Soft Loan Fund, Standup India scheme, MSME Sustainable ZED certification and various Startup India initiatives open integrated avenues for enterprise formalization, adoption of clean technologies, accessing credit and building capacities. Partnering with Online Travel Aggregators (OTAs), digital commerce majors and payment gateways can also unlock lucrative domestic and overseas engagement channels.

As India traverses its journey over the next 25 years to become an advanced $30 trillion economy, the realization of the full potential of MSMEs will be vital. With the right policies strengthening technological absorption, skilling ecosystems and market linkages, 63 million small engines of innovation and employment can steer a sustainable, self-reliant, and inclusive growth trajectory.