The term MSME (Micro, Small and Medium Enterprises) was coined by the Government of India under the Micro, Small and Medium Enterprises Development (MSMED) Act, 2006. MSME is initiated and managed by the Ministry of MSME (MoMSME). entities engaged in the production, manufacture, processing or storage of goods and merchandise.
The MSME sector is considered the backbone of the Indian economy and accounts for nearly 27% of the country’s GDP. First of all, it works for the development of people from backward and rural areas. According to official data as of April 31, 2022, there are currently more than 6.33 million MSMEs, employing approx. 11.10 people across the country.
To know more about MSMEs in India, let’s discuss their basics like classifications, loan schemes, role and importance in socio-economic development of India.
Read also: 5 steps to register MSME and know required documents, process, fees
New classification of MSME
The distinction between manufacturing enterprises and service enterprises has been eliminated by making the amount of investment and annual turnover the same for enterprises engaged in both sectors.
MSME credit schemes initiated by the government. of India
The MSME schemes offered by financial institutions and initiated by the Government of India are mentioned below:
Read also: What documents are required to obtain a quick loan for MSMEs?
Comparison of interest rates on business loans offered by leading banks/NBFCs – 2022
Features of Ministry of MSME (MoMSME)
- Works for the welfare of artisans and workers
- Provides credit limit or financing support from banks
- Promotes entrepreneurship development and professional development through specialized training centers
- Supports technology upgrades, infrastructure development and modernization
- Offers assistance to improve access to domestic and export markets
- Provides modern equipment for testing and quality certification
- Supports packaging, product development and design intervention
The main structures working in MoMSME are:
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Opportunities in MSME
The opportunities in the MSME industry are huge due to the following factors:
- Export promotion and potential of Indian products
- Funding – finance and subsidies
- Facilitation and support of the government
- Growing demand in the domestic market
- Less capital required
- Personnel training
- Project profiles
- Purchase of raw materials and machines
- Tooling and testing support and more
MSME Registration Information Sheet (2021-22)
The total number of MSME registrations is 9,11,5082 |
||
| micro | Small | Average |
| 8,70,4675 | 3,73,456 | 36,951 |
Source: Official website of Udyam Registration. Figures updated as of July 2022.
Estimated number of MSMEs in India – 2021-2022
| Category/sector of activity | Estimated number of enterprises (in lakhs) | to share |
| Production | 196.65 | 31% |
| Trade | 230.35 | 36% |
| Services | 206.85 | 33% |
| Everyone | 633.88 | 100% |
Source: https://msme.gov.in/ (Last updated July 2022)
List of projects that have been identified by the Ministry of MSMEs to promote MSMEs in the desired areas with a range of projects:
- Prime Minister Job Creation Program (PMEGP) – 178
- Development of clusters of micro and small enterprises (MSE-CDP) – 81
- EDP/MDP scheme – 46
- Development of entrepreneurial and managerial activity of SMEs through incubators – 13
- MSME market development assistance (MDA) – 12
- Marketing Assistance and Technology Upgrading (MATU) – 10
- Revised Scheme of Fund for Rehabilitation of Traditional Industries (SFURTI) – 10
- Credit Guarantee Trust Fund for Micro and Small Enterprises (CGTMSE) – 7
- Credit subsidy for technology modernization – 6
- Financial support for MSMEs in the ZED – 4 certification scheme
- Technological and qualitative support of MSMEs – 4
- Competitiveness of lean production for MSMEs – 3
- Design clinic of design expertise for small and medium-sized enterprises – 1
- Assistance to Educational Institutions (ATI) – 1
- Scheme for Promotion of Innovation, Rural Industry and Entrepreneurship (ASPIRE) -1
- Skill Development and Mahila Coir Yojana (MCY) – 2
- Market Promotion and Development Scheme (MPDA) 1
- Performance and credit rating scheme 1
- Marketing Support/Assistance to MSMEs (Barcode)
- Others – 52
Role of MSMEs in Indian Economy
In 1961, as a result of the merger of the Ministry of Small Industry and the Ministry of Agrarian and Rural Industry; the Ministry of Micro, Small and Medium Enterprises (M/o MSME) was formed.
MSMEs manufacture and produce a wide range of products for domestic and international markets. MSMEs help in promoting the growth and development of Khadi, Village and Coir industries in collaboration with concerned Ministries, State Governments and stakeholders.
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The tabulated data below are from the Central Statistical Office (CSU) and the Ministry of Statistics and Program Implementation.
Contribution of MSMEs to the country’s economy at current prices
Source: Main Statistical Office (GSU), Ministry of Statistics and Program Implementation
Under the Micro, Small and Medium Enterprises Development Act, 2006, the Government of India established the National Board for Micro, Small and Medium Enterprises (NBMSME) to study the factors affecting the promotion and development of MSMEs. This council also reviews existing policies and makes recommendations to the government for the development of the MSME sector.
The term Micro Small and Medium Enterprise (MSME) was coined to become an integral part of the supply chain of products and services; moreover, a creator of large-scale employment opportunities in rural India.
