INTRODUCTION

The Micro, Small and Medium enterprises (MSMEs) have been accepted as the engine of economics
growth and for promoting equitable development in all over the world. Let there be any category of
countries (Developed, Developing and Under Developed), the existence of MSMEs is inevitable. The
major advantage of the sector is its pivotal role through its contribution in Industrial output, Exports,
and majorly in Employment generation at low capital cost. The labour intensity of the MSME sector is
much higher than that of the large enterprises. The MSMEs constitute over 90% of total enterprises in
most of the economies and are credited with generating the highest rates of employment growth and
account for a major share of industrial production and exports. In India, the MSMEs contribution is
highly remarkable in the overall industrial economy of the country. In recent years the MSME sector has
consistently registered higher growth rate compared to the overall industrial sector. With its agility and
dynamism, the sector has shown admirable innovativeness and adaptability to survive the recent
economic downturn and recession. In Indian market, MSMEs rapid growth could be seen as Indian
entrepreneurs are making remarkable progress in various Industries like Manufacturing, Precision
Engineering Design, Food Processing, Pharmaceutical, Textile & Garments, Retail, IT and ITES, Agro and
Service sector. The sector not only serves for urban market but also helps in industrialization of rural and
backward areas, reducing regional Imbalances and assuring more equitable distribution of national
income and wealth. MSMEs complement large industries as ancillary units and contribute enormously to
the socioeconomic development of the country.

CHAIRPERSON
Narayan Tatu Rane who is appointed as the ex-officio chairperson is a Union Minister, Ministry
of Micro, Small and Medium Enterprises. Rane had earlier also served as the Cabinet Minister
for Industry, Port, Employment, and Self-employment verticals in the Maharashtra government.
According to the MSME Ministry, Rane has been in public service across different capacities for
over 35 years. The Minister said MSMEs are amongst the strongest drivers of economic
development, innovation, and employment. Rane called for the aim to “Unshackle the MSMEs
and unleash their full potential to double their contribution towards a $5 trillion economy and
transform the lives of the aspiring millions through jobs, exports, and inclusive growth.

NEW MSME CLASSIFICATION

A proposal was made to redefine MSMEs by the Micro, Small and Medium Enterprises
Development (Amendment) Bill, 2018, to classify them as manufacturing or service-providing
enterprises, based on their annual turnover
Features of the Ministry of MSME
Works for the welfare of artisans and workers

Provides credit limit or funding support from banks

Promotes entrepreneurship development and skill up-gradation via specialized training

centers

Supports technology up-gradation, infrastructural development, and modernization

Offers assistance for improved access to domestic and export markets

Provides modern testing facilities and quality certification

Supports packaging, product development, and design intervention

ROLE OF MSME IN INDIAN ECONOMY

In 1961, with the merger of the Ministry of Small Scale Industries and the Ministry of Agro and Rural
Industries; the Ministry of Micro, Small, and Medium Enterprises (M/o MSME) was formed.

MSMEs produce and manufacture a wide variety of products for domestic, as well as international
markets. MSMEs help in the promotion of growth and development of Khadi, Village, and Coir
Industries, in cooperation with concerned ministries, state governments, and stakeholders.
Key entities that work under the MSME:

 A Scheme for Promotion of Innovation, Rural Industries, and Entrepreneurship (ASPIRE)

 Khadi and Village Industries Commission (KVIC)
 Mahatma Gandhi Institute for Rural Industrialization (MGIRI)
 National Institute for Micro, Small, and Medium Enterprises (NIMSME)
 National Small Industries Corporation (NSIC)
 Scheme of Fund for Regeneration of Traditional Industries (SFURTI)

Opportunities in MSMEs
The opportunities in the MSME industry are massive due to the succeeding factors:

 Export Promotion and potential for Indian products

 Funding – Finance & Subsidies
 Government’s Promotion and Support
 Growth in demand in the domestic market
 Less Capital required
 Manpower Training
 Project Profiles
 Raw Material and Machinery Procurement
 Tooling & Testing support and much more
CONTRIBUTION OF MSMEs TO GDP
As per the information received from Central Statistics Office, Ministry of Statistics & PI, Share
of MSME Gross Value Added (GVA) in All India Gross Domestic Product at current prices
(2011-12) for the year 2018-19 and 2019-20 were 30.5% and 30.0% respectively.

The MSME sector is an important sector of the Indian economy. As per the information
received from Central Statistics Office, Ministry of Statistics & PI, share of MSME Gross Value
Added (GVA) in All India Gross Domestic Product at current prices (2011-12) for the year
2018-19 and 2019-20 were 30.5% and 30.0% respectively. The share of the MSME
manufacturing in All India manufacturing gross value output during the year 2018-19 and 2019-
20 were 36.9% and 36.9% respectively. Further, as per the information received from
Directorate General of Commercial Intelligence and Statistics, the share of export of specified
MSME related products to All India exports during 2019-20 and 2020-21 was 49.8% and 49.5%
respectively.
As per 73rd Round of NSS Report on Unincorporated Non-Agricultural Enterprises' (July
2015- June 2016) conducted by Ministry of Statistics & PI, estimated number of workers in
MSME sector was 11.10 crore.
Under the Prime Minister’s Employment Generation Programme (PMEGP), the
estimated employment generated (number of persons) in micro enterprises during the year 2020-
21 and 2021-22 (as on 01.07.2021) are 5.95 lakh and 1.19 lakh respectively.
MAJOR PROBLEMS FACED BY MSME
INDEX

 INTRODUCTION
 CHAIRPERSON
 ACT 2006
 NEW MSME CLASSIFICATION
 PREVIOUS CLASSIFICATION
 AIMS AND OBJECTIVE OF MSME
 Features of the Ministry of MSME
 ROLE OF MSME IN INDIAN ECONOMY
 Key entities that work under the MSME
 Opportunities in MSMEs
 Contribution Of MSMEs toGDP


 MAJOR PROBLEMS FACED BY MSME

 SCHEMES LAUNCHED BY GOVERNMENT
 ATMA NIRBHAR MSME
 CONCLUSION
 BIBLIOGRAPHY