Growth and Future Prospects of MSME Industries in India

MSMEs are the backbone of the Indian economy, contributing hugely to our country's economic growth. Today, this sector has emerged as the key driver of innovation, growth, and employment, even in less developed areas in India. 

In today's article, you will learn about the growth and prospects of MSME industries in India. 

MSMEs: Definition 

Micro, Small, and Medium Enterprises consist of enterprises engaged in the production, manufacturing, and processing of goods and commodities. According to the Micro, Small, and Medium Enterprises Development Act of 2006, it is divided into three categories. 

1. Microenterprise

It refers to those enterprises where the investment in plant or machinery does not go beyond ₹1 crore and does not get a return of above ₹5 crores.

2. Small Enterprise

Those enterprises where investment in machinery or equipment does not exceed ₹ 10 crores, and there is no turnover of above ₹50 crores.

3. Medium enterprise

It refers to an enterprise that invested in machinery or equipment that does not go above ₹50 crores and no return of above ₹250 crores.

So, to help these sectors flourish in India, the government has launched several initiatives and schemes to help them grow. 

Lists of Business under MSMEs

Here are some of the leading companies that come under MSMEs in India. These enterprises are 

1. Leather products
2. Molding of products like combs, umbrella frames, plastic toys, etc.
3. Natural fragrance and flavours
4. Placement and management consultancy services
5. Training and educational institute.
6. X-ray clinics
7. Khadi products and hosiery products
8. Handicraft activities like spinning, weaving, artisans
9. Poultry farm
10. Bicycle parts
11. Stationery items
12. Call centre
13. Rubber products
14. IT solutions Testing labs for industries
15. Auto businesses 

The Growth of MSMEs in India 

In India, the growth of Micro, Small, and Medium Enterprises (MSMEs) has been remarkable, with 633.9 lakh such enterprises contributing to the nation's economy. Moreover, these MSMEs foster economic development, especially in rural areas where 324.9 lakh businesses thrive, supporting local communities.

About 99% of the Micro-enterprises, making up of the total MSMEs, account for a significant 630.5 lakh enterprises, showcasing the prevalence of small-scale businesses. Small businesses, numbering 3.3 lakh, constitute 0.5% of all MSMEs, while medium businesses, a smaller segment at 0.05 lakh, contribute 0.01%. 

So, this diversity in enterprise sizes reflects the dynamic nature of India's economic landscape.

Regarding women, independent MP Kartikeya Sharma mentions about 1,17,36,406 women owning MSMEs registered between 1st July 2020 and 4th December 2023.

The MSMEs, SMEs, and Startups are growing quickly, working towards fulfilling the aim of becoming a developed nation by 2047. The MSMEs and the small and medium-sized enterprises are well known for contributing to the nation's economy. About 100 million people are employed in this sector, accounting for 45% of manufacturing output and over 40% of the country's exports. 

Take a look at the job creation in terms of industry specifically.

Look at the employment statistics in both urban and rural India.

Impact of MSMEs in India 

Micro, Small, and Medium Enterprises (MSMEs) play a vital role in India's economy, contributing significantly to employment generation, industrial production, and overall economic growth. They are often run by entrepreneurs and small business owners, which form the backbone of the Indian business landscape.

To understand better, let's have a look! 

1. Employment 

MSMEs are major job creators that offer employment opportunities to a substantial portion of the population. Moreover, their ability to adapt easily allows them to respond quickly to the changing market trends, increasing the need for innovation and agility in the business sector.

2. Manufacturing 

MSMEs are major contributors that significantly contribute to our industrial output by manufacturing diverse products and services. It promotes economic diversification but also strengthens the country's manufacturing base. Also, localized operations often positively impact regional development, promoting economic activities in various parts of the country.

3. Sustainable 

Moreover, MSMEs play a crucial role in alleviating poverty by providing livelihoods to individuals who might struggle for employment. Additionally, they serve as a breeding ground for entrepreneurship, encouraging individuals to start and sustain their businesses.

The prospect of MSME in the coming Years 

India has become a hotspot for manufacturing companies, especially since they are moving from China, making it a golden chance for smaller businesses. They are, moreover, allowing small enterprises to grow bigger and stronger.

The entry of big foreign companies stirs MSMEs to create more direct employment opportunities and supply chains. It makes MSMEs leverage better technologies, expertise, and experience from these large industries, enhancing their competitiveness and providing an opportunity to access the global market. 

Also, our Prime Minister's visit to the US brought significant FDI flows to our country, providing opportunities for MSMEs. FDI increases the chances of these MSMEs and small and medium-sized enterprises to partner with large firms, enhancing better technologies and workforces. 

Conclusion 

The future of MSMEs seems bright for our country with 30% contribution to the GDP. This sectors is working hard towards creating a worth of Rs 1 trillion by 2028. 

Today, MVIKAS India's First 5 PL Company assists these MSME sectors by streamlining buying, selling, and logistics. Also, MVIKAS is simplifying procurement processes, boosting sales efficiency, managing smooth logistics, providing advanced technologies, and helping small and medium-sized through financial assistance, empowering small businesses to thrive in a competitive market in India and internationally.

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