About :- Micro, Small, and Medium Enterprises (MSMEs) are businesses engaged in the production, processing, or preservation of goods and commodities.
Classification Criteria :-
Enterprises are classified based on two parameters:
1. Investment in plant and machinery (manufacturing) or equipment (services).
2. Annual Turnover.
Regulatory Structure
The sector is governed by the Ministry of Micro, Small, and Medium Enterprises, established in 2007. The primary legal framework is the Micro, Small, and Medium Enterprises Development (MSMED) Act, 2006. This Act defines the sector, establishes a National Board, and empowers the Central Government to enhance MSME competitiveness.
Economic Significance of MSMEs in India
- MSMEs are crucial to India’s economic architecture, contributing significantly across multiple domains.
GDP and Employment
The sector contributes approximately 30% to India’s Gross Domestic Product (GDP). It is highly labor-intensive, providing employment to over 110 million (11 crore) people, particularly in industries like textiles.
Manufacturing and Exports :
MSMEs are major contributors to the national manufacturing output, especially in sectors like food processing, engineering, and chemicals. They account for nearly 45% of India’s total exports, strengthening the country’s global trade presence through diverse products (e.g., handicrafts, footwear).
Key Government Support Initiatives
The Government of India has implemented several programs to support the MSME sector.
- Pradhan Mantri MUDRA Yojana: Provides loans up to ₹10 lakh to non-corporate, non-farm small/micro-enterprises.
- Credit Guarantee Schemes (CGTMSE): Mitigates risk for lenders by offering guarantees, facilitating easier credit access for MSMEs.
- MSME SAMADHAAN: An online portal for filing and monitoring disputes related to delayed payments from buyers.
- Government e-Marketplace (GeM): A public procurement platform that provides MSMEs access to government contracts.
- Udyam Registration: A simplified, centralized online registration process required to avail government benefits.
- CHAMPIONS Portal: An ICT-based system for addressing MSME grievances and providing comprehensive support.
