World MSME day is being celebrated across the world, and notable personalities from across spheres are wishing the best for Micro-, Small, and Medium-sized Enterprises (MSMEs). The United Nations General Assembly has proclaimed June 27 as “MSME Day” to highlight the significant role these businesses play in sustainable development. Member States are encouraged to support the observance of this day through policy dialogues, workshops for practitioners, sharing of global experiences, and testimonials from business owners. These activities aim to be conducted in partnership with public, private, and non-profit organizations.
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MSMEs play a crucial role in the global economy, accounting for 90% of businesses, 60 to 70% of employment, and 50% of GDP worldwide, according to the United Nations. The Ministry of MSME in India has stated that it would celebrate “Udyami Bharat – MSME Day” on 27 June 2024. “These enterprises are the backbone of societies everywhere, contributing significantly to local and national economies and sustaining livelihoods, particularly among the working poor, women, youth, and vulnerable groups,” said the Ministry.
Government Releases Statistics on Small Medium Enterprises in India for MSME Day
According to the latest data from the Ministry of Statistics & Programme Implementation, MSMEs contributed 30.5%, 27.2%, and 29.2% to India’s GDP in the years 2019-20, 2020-21, and 2021-22, respectively. Their share in manufacturing output stood at 36.6%, 36.9%, and 36.2% for the same years. The Directorate General of Commercial Intelligence and Statistics reported that MSME-specific products accounted for 49.4%, 45.0%, and 43.6% of India’s exports in 2020-21, 2021-22, and 2022-23, respectively. As of August 2, 2023, data from the Udyam Registration Portal indicates that MSMEs registered between July 1, 2020, and August 1, 2023, employed a total of 123.6 million people across India.
The Ministry of Micro, Small and Medium Enterprises supports the sector’s growth through various initiatives focusing on credit support, new enterprise development, formalization, technology assistance, infrastructure, skill development, training, and market access. Key programs include the Prime Minister’s Employment Generation Programme (PMEGP), Credit Guarantee Scheme for Micro and Small Enterprises (CGTMSE), Micro and Small Enterprises-Cluster Development Programme (MSE-CDP), Entrepreneurship Skill Development Programme (ESDP), Procurement and Marketing Support Scheme (PMS), and the National SC/ST Hub (NSSH).
What Industry Says on MSME Day
Rahul Garg, CEO and founder, Moglix, recognized the significant contributions made by MSMEs to employment generation, poverty alleviation, innovation, and inclusive economic growth on World MSME Day. “India’s MSMEs are the backbone of our economy. Micro-enterprises lead the charge, accounting for nearly 98% of Udyam Portal registrations.
These are the engines of job creation and technological innovation, fostering incremental growth. They are essential for economic development, providing vital employment opportunities. Presently, limited access to financing and complex regulations is a challenge to MSMEs, hence, there is a need for nuanced government framework that acknowledges the sector’s unique needs. Expanding the MSME definition can be a positive step. MSMEs’ adaptability, due to their human-centric nature, allows them to embrace circular economy models. Well-researched government programs, focused on geographically clustered
MSMEs, could facilitate this. Moving forward, aligning state and national MSME laws is crucial. Alongside promoting new businesses, initiatives should ensure existing MSMEs thrive. Regulators should look to consider non-financial support beyond tax breaks and subsidies,” he said.
“World MSME Day celebrates the crucial role of micro, small, and medium enterprises (MSMEs) in achieving the Sustainable Development Goals. Many MSMEs situated at Infopark contribute significantly by providing employment and supporting the local community,” said Infopark.
SME Development Finance Corporation expressing pride on the MSMEs in India said: “As a financial institution dedicated to empowering MSMEs, we are proud to commemorate International MSME Day. This annual observance serves as a testament to the resilience and invaluable contributions of these business entities, which are the backbone of our economy. Together, let us celebrate the entrepreneurial spirit and the vital role MSMEs play in fostering sustainable economic development and inclusive prosperity.”
George Alexander Muthoot, Managing Director, Muthoot Finance, sharing statistics on gold loans taken by MSMEs said: “According to industry estimates, Indian households have more than 25000 tonnes of gold. And, less than a fifth of that is being pledged to raise loans. About 60% of this market still remains outside the formal financial system, indicating vast potential in the gold loan sector. Muthoot Finance recognizes the potential of pledging this idle gold in driving entrepreneurial spirit by navigating through unforeseen emergencies and working capital needs of small business. Gold loan, our principal business, is often opted by MSMEs and small business owners for a constant cash flow to manage critical situations such as machinery breakdowns, supply chain disruptions as well as to expand business operations or invest in newer technologies. In such situations, most MSME owners face rejection from traditional lenders often leading to closure of operations. In alignment with the increased focus from RBI on accelerating growth and reducing stress in the MSME segment, gold loan NBFCs play a crucial role in providing them with a working capital cushion with quick access to funds and flexible amounts all without the need for a strong credit history.”
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He went on to add: “This is exactly what they need to seize new opportunities, and maintain business continuity. Muthoot Finance is opting for innovative technologies to revolutionize credit access to MSMEs. Although our MSME customers may require to physically pledge their gold for evaluation, Muthoot Finance’s extensive 5000+ branch network, and a robust phygital infrastructure through Loan@Home initiative facilitate faster approval of loans and disbursements. We also encourage more digital transactions while disbursing gold loans, especially loans of Rs. 20,000 and above. We disburse loans via IMPS or UPI, apart from RTGS/NEFT networks which ensures that their credit history is also strengthened. Our mobile app and website provide customers with easy access to loan details and repayment options to enhance transparency and include MSMEs into the modern digital economy.”
