MSMEs are the growth engine of India, contribute 30% to the country's GDP.

Union Minister for MSME, Narayan Tatu Rane recently emphasized that the Micro, Small and Medium Enterprises sector is contributing one-third to India’s GDP and has remarkable potential to grow further. Addressing the ‘Maharashtra MSME Conference’ organized by ASSOCHAM, Rane highlighted the catalyzing role of MSMEs in the growth of India.

He said that MSMEs need to be supported with better infrastructure and access to technology and finance.

The Union minister said, “Moving forward, there is a collective attempt to popularize and increase acceptance for the ‘Made in India’ tag within the country and globally. There is also an increasing effort to double the number of micro industries in the next five years. And, we should focus on grooming high growth industries which are going to be the future growth drivers of the economy and the country.”
Narayan Tatu Rane went on to add that the youth of the country are going to be the flag bearer of the growth of India, and hence need to be supported by way of better work opportunities, training, and an entrepreneurial ecosystem. He said that MSMEs need to be supported with better infrastructure and access to technology and finance.

Sivasubramanian Ramann, CMD of Small Industries Development Bank of India(SIDBI), speaking on the occasion that in five years the number of MSMEs in India has increased from 6.5 crores to over 9 crores. Of these, 1.5 crore MSMEs are under GST. "The remaining MSMEs also need finance from banks and NBFCs but are not on the radar of banks because they don’t have Udyam numbers.”

Udyam is an online system for registering micro, small and medium enterprises launched by the Union MSME Ministry on July 1, 2020. More than 88 lakh MSMEs are registered on the Udyam registration portal.

“With Udyam number, banks can categorize lending to MSMEs as priority sector loans. In order to bridge this gap, SIDBI is working with micro-finance institutions and small NBFCs to provide loans to small business entities. More than 5 crore MSMEs will benefit from a special digital program that is being set up to provide Udyam numbers to them in the next two years,” he added.

“We have the experience, ability, and competence to give money for greenfield projects and many banks provide additional assistance to projects funded by us. Payment to MSME will need to be further strengthened using digital data available with the Ministry of Corporate Affairs.” he further stated.

Vinod Pandey, Chairman, ASSOCHAM National Council on Global Value Chain and Director, Govt. Affair and External Affairs, BMW India, added that MSMEs play a key role in economic development. The sector accounts for over 80 percent of businesses and contributes to more than half of the employee share.
“The share of the formal MSME sector in the GDP is up to 40 percent in emerging economies. The importance of the sector in India’s economic growth cannot be overemphasized. The presence of over 63 million MSMEs employing over 110 million people staggered across services, manufacturing sector contributes nearly 30 percent of the GDP. The ambitious target of USD 5 billion economy with 25 percent contribution from the manufacturing sector will require the MSME sector to play a pivotal role. In addition to the various facilitating schemes announced by the government to support the sector, ramping up investment into the sector will be crucial”, Pandey said.

Suhail Nathani, Chairman, ASSOCHAM WTO, Trade & Investment, Council and Managing Partner, ELP, said, “As we look forward to accelerated growth, MSME must be enabled to play a larger role in the scheme of things. Amending existing Free Trade Agreements (FTA) and ensuring that future FTAs include a charter on MSME will have a significant impact on the ability of small Indian producers to align with globalised trading regimes and explore cross-country opportunities more effectively. Such a move will also go a long way in promoting capacity building and efficient utilisation of available resources.”

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