India’s MSMEs are the backbone of the country’s growth

With nearly 63 million micro, small, and medium enterprises (MSMEs), the Indian MSME sector is not only the second largest employment generator in the country but also contributes to over 30 percent of the country’s GDP and almost a third of the nation’s manufacturing output and generates over 120 million jobs across industries and regions in the country contributing towards wealth creation at the grassroot level.

The digital revolution has penetrated up to the last mile, right from the ministry to the state governments to the district to the gram panchayat to the MSMEs. The policies formulated by the government of India are all based on digital blueprint and digital platforms. Without it, no program is implemented in the country.

The Indian MSME industry is expected to contribute approx. 50% to the country’s GDP by 2025. The industry is the second-largest employment generator in India after agriculture as of FY 2022, with more than 111 million people employed. Most MSMEs faced issues such as having access to finance, marketing their products, and even struggling to cover expenses such as employee salaries, office rent, bills, taxes, and loans EMIs.

The segment enables the inclusion of generally neglected entrepreneurs e.g. women, marginal entrepreneurs and empowerment and wealth creation at the Grass root. In FY22 alone, 8.59 lakh women-led MSMEs got registered on Udyam portal which is 17% of the total MSME registration. As many as 63.4 million units contribute 6.11% of the manufacturing GDP and 24.63% of services GDP.

MSMEs play a critical role in Nation Building and growth of the economy. It is necessary that the support to this segment is accelerated, and government targets its ease of doing business initiative towards MSMEs. Several corporates and cloud providers has designed their roadmap to approach MSMEs to their growth to go digital ,which will enable MSMEs to increase their overall operational efficiency, to provide better customer service using digital platforms and to enhance the overall customer experience.

Technological upgradation of the MSMEs minimises external risks and encourages corporatisation of the MSME sector. Cloud is critical for MSMEs and digital-native startups which are coming of age very quickly. This in turn will help MSMEs to face competition from other players, to expand their customer reach and to reach out to new geographies. All this is critical in the long run for MSME’s growth in India.