MSME: Role of MSMEs crucial for India to become a $5-trillion economy, says Kant – The Economic Times

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The MSME sector is the backbone of the Indian economic structure and has a very important role in buffering it from global economic shocks and adversities.

India’s micro, small and medium businesses play a crucial role in running the economy and providing jobs in the country. Almost everyone is hugely dependent on them for some needs or the other. To recognise the contribution of this sector, ET Rise Top MSMEs Ranking has in its second edition focused on the success stories and achievements of home-grown companies.

Speaking at the ET Rise Top MSMEs Ranking event, which was organised online due to the pandemic, NITI Aayog CEO Amitabh Kant said the micro, small and medium enterprises have a very vital role in fuelling the economic growth of the country. The focus on them is more now as India aspires to be a $5-trillion economy.

“The sector contributes in a significant way to the growth of the Indian economy — with a vast network of about 6.3 crore units producing more than 8,000 products and a share of around 30% in nominal GDP,” said Kant.

Talking about merchandise exports he added that it was also growing at a fast pace which signified that Indian MSMEs were globally competitive and their product services were accepted overseas. The share of the sector in manufacturing output is 33%. Around 50% of the total MSMEs operate in rural areas and provide 45% of the total employment. About 97% of the total employment in the MSME sector comes from the micro segment.

To lend a helping hand to this sector, the government has come up with several schemes. These are in the form of credit and financial assistance, skill development and training, infrastructure support and technology upgradation.

Under the Atmanirbhar Bharat scheme, the government has taken many initiatives within the Covid-19 relief package to promote this sector. Elaborating on this, Kant said, “The government introduced the Emergency Credit Line Guarantee Scheme of Rs 3 lakh crore for collateral-free automatic loans for businesses, including MSMEs; Credit Guarantee Scheme for Subordinate Debt of Rs 20,000 crore and Rs 50,000-crore equity infusion through Self-Reliant India Fund; a revised category of classification of MSMEs; a registration of MSMEs through the Udyam portal for ease of doing business and no global tenders for procurement of Rs 200 crore.”

Watch ET Rise Top MSMEs Ranking

The MSME sector is the backbone of the Indian economic structure and has a very important role in buffering it from global economic shocks and adversities. “It is imperative to recognise and give impetus to these home-grown businesses and enterprises. ET Rise is providing a platform to recognise and celebrate the success of these homegrown MSMEs,” he added.

These ratings help MSMEs in many ways, including enhancing their acceptability among investors. Based on which many banks offer better interest rate concessions to the organisations. There is an increased visibility, and scope for improvement for these businesses. The rating is a comparative exercise that evaluates the relative ranking of the entity across industry. This covers important risk factors and areas for improvement for the entities concerned, thus providing valuable third-party feedback. The rankings also help large corporations evaluate vendors and dealers.

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