What is MSME?

MSME- an abbreviation of Micro, Small & Medium enterprises- is the pillar of economic growth in many developed, and developing countries in the world. Often rightly termed as “the engine of growth” for India, MSME has played a prominent role in the development of the country in terms of creating employment opportunities-MSME has employed more than 50 million people, scaling manufacturing capabilities, curtailing regional disparities, balancing the distribution of wealth, and contributing to the GDP-MSME sector forms 8% of GDP. Though India is still facing infrastructural problems, lack of proper market linkages, and challenges in terms of the flow of institutional credit, it has seen tremendous growth in this sector.
The advantage of this sector is it requires less investment, thus creating employment on a large scale, and reducing the employment and underemployment problems. Moreover, this sector has survived almost all threats emerging out of still completion from both the domestic and international market.
Various stakeholders have been advocating an MSME Policy for India. The sweep of the sector is so wide, so varied and so differentiated that a single size fits all will not work. The sheer numbers are staggering. However, they may be recorded to understand the magnitude of the task. As per the fourth Census of MSMEs the Report for which was published in 2012, the total number of MSMEs in India are 3.6 crores employing over 8 crore people. It is the second largest employer after agriculture. It also accounts for 45 % of total industrial production, 40% of total exports and contributes very significantly to the GDP. Manufacturing segment within the MSME contributes to 7.09% of GDP. MSMEs also contribute to 30.50% of services. The total contribution of MSMEs to the GDP is 37.54%. The MSMEs of India would be the cradle for the “Make in India” vision. This would be the nursery where existing small businesses have the potential to become world beaters tomorrow. The larger players amongst the MSME space also are in a unique position to become global players attracting partners with technology and funds. The Policy framework must encourage this. It will also help in to create employment on a massive scale

1 thought on “What is MSME?”

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