Micro, Small and Medium Enterprises (MSMEs) Day 2025

Importance of MSMEs

Worldwide, MSMEs make up the largest portion of the business landscape, constituting almost 90% of businesses and more than 50% of overall jobs.

In India, MSMEs account for approximately 30% of the GDP and more than 45% of the nation's exports.

MSMEs are the second-biggest source of jobs in India, following agriculture.

Exports from MSMEs have experienced significant expansion, increasing from ₹3.95 lakh crore in 2020-21 to ₹12.39 lakh crore in 2024-25.

Obstacles Encountered by MSMEs in India

Restricted Access to Financing: Many MSMEs face challenges in obtaining loans because of insufficient collateral and absence of a formal credit record.

Obsolete Technology: Numerous MSMEs utilize outdated technology because of expensive prices and a lack of knowledge.

Regulatory Load: Complicated adherence to tax legislation, labor rules, and permits raises operational challenges.

Late Payments: Payments from major corporations and government clients are frequently postponed, impacting the cash flow of MSMEs.

Low Efficiency: Numerous MSMEs experience low efficiency because of informal operations and an absence of modern methods.

Skilled Workforce Deficiency: There is an insufficient availability of qualified and trained personnel in the industry.

Restricted Market Access: MSMEs face challenges in branding, promoting, and accessing broader domestic and international markets.

Informality and Absence of Data: Many MSMEs stay unregistered, rendering them unqualified for formal assistance.

Susceptibility to External Disruptions: MSMEs are very prone to disturbances such as COVID-19, inflation, and worldwide economic downturns.

Main Strategies to Assist MSMEs

PM Vishwakarma: Initiated in 2023, this is a central sector program for the period 2023-24 to 2027-28.

Its goal is to empower traditional artisans and craftspeople by improving product quality and linking them to broader markets.

Udyam Registration Portal: Introduced in 2020, it provides a no-cost, digital, and self-affirmed registration method for MSMEs. Prime Minister’s Employment Generation Programme (PMEGP): PMEGP is a subsidy scheme linked to credit that promotes self-employment by facilitating the establishment of micro-enterprises in the non-agricultural sector.

Scheme for the Revitalization of Traditional Industries (SFURTI): Initiated in 2005-06, SFURTI aims to group traditional artisans into clusters to enhance competitiveness, foster product innovation, and ensure sustainable income sources.

Public Procurement Policy for Micro and Small Enterprises: It was established in 2012 to guarantee market entry for Micro and Small Enterprises.

It requires Central Ministries to procure 25% annually from MSEs, which includes 4% from SC/ST-owned MSEs and 3% from MSEs owned by women entrepreneurs.

MSME Hackathon 4.0 (2024): Aids 500 young entrepreneurs with financial support up to Rs. 15 lakh for both innovation and incubation.

MSME-TEAM Scheme (2024): A trade facilitation program with a budget of Rs. 277.35 crore, assisting 5 lakh MSEs (comprising 2.5 lakh women-led) in digital onboarding, cataloging, logistics, and packaging.

Khadi and Village Industries: The Government is supporting the Khadi and Village Industries (KVI) sector via the Khadi and Gramodyog Vikas Yojana (KGVY), a Central Sector Scheme without any state involvement.

International Cooperation Program: Aids MSMEs in accessing global markets by enabling participation in international fairs, exhibitions, and knowledge-sharing events on a reimbursement basis.

Conclusion

MSMEs are transforming India's growth narrative by fostering innovation, creating jobs, and uplifting local communities.

Supported by robust policies, digital technologies, and entry to fresh markets, these businesses are transforming into drivers of sustainable and inclusive progress.