India's micro, small and medium enterprises (MSMEs) have witnessed a significant transformation in the past year. The government's concerted efforts to bridge the formalisation gap in the MSME sector have resulted in a surge in the number of registered MSMEs from 1.65 crore to 5 crore. This achievement was highlighted by Dr Rajneesh, the additional secretary and development commissioner for MSMEs, during the 'FICCI CMSME National Conference 2024'. The government, in collaboration with state governments and industry associations, initiated a drive to encourage MSMEs to register with the government. This was in response to the estimation that there were around 6.5-7 crore MSMEs in the economy, of which only 1.65 crore were registered with the government until last year. The increase in the number of registered MSMEs is a testament to the success of this initiative.
In addition to increasing the number of registered MSMEs, the government has also been actively working to bridge the credit gap for MSMEs. The Credit Guarantee Trust for Micro and Small Enterprises (CGTMSE), a body providing credit guarantees for MSMEs, has played a crucial role in this regard. Over the past 22 years, the CGTMSE has extended credit guarantees amounting to Rs 2.6 lakh crore. However, in the last two years alone, credit guarantees worth Rs 4 lakh crore have been extended. The government aims to ramp up these credit guarantees by another Rs 5 lakh crore in the next two years. This move is expected to provide a significant boost to MSMEs, enabling them to access the necessary credit to grow and expand their operations.
Dr Rajneesh further highlighted the significant contribution of MSMEs to the Indian economy. MSMEs contribute around 30 per cent to the national GDP, 36 per cent to Indian manufacturing, and around 44 per cent to Indian exports. They also provide employment opportunities to 21 crore people. He emphasised that MSMEs are a crucial part of India's economic resilience story, being the largest employer in the economy after agriculture. The Quality Council of India (QCI) also recognises the potential of MSMEs in shaping India's future. Chakravarthy T Kannan, Secretary General, QCI, stressed the need for several enablers, including AI and innovation, to help MSMEs build a strong future-ready capability. He mentioned the reconstitution of ONDC and the collaboration with them to make ONDC a platform for MSMEs with a quality guarantee.
The government's efforts to boost the MSME sector have yielded significant results. The increase in the number of registered MSMEs and the ramping up of credit guarantees are positive developments that are expected to spur the growth of MSMEs. However, there is a need for continued focus on improving the ease of doing business, enhancing the quality of products and services, and providing the necessary support to MSMEs to help them navigate the challenges and seize the opportunities in the evolving economic landscape. The future of India's economy hinges on the success of its MSMEs, and the government's initiatives are a step in the right direction.
