The Backbone of Indian Economy.. MSME Sector - Potential for Growth

The MSME sector in India continues to prove remarkable resilience in the face of rambling global and domestic economies. Significance of MSMEs can be observed in the developing economies where this sector constitutes over 90% of total enterprises and greatly to industrial production, exports and employment generation.

A distinctive feature of MSMEs is that a very large proportion of them are concentrated around likely 6000 clusters plus 1157 traditional industrial clusters, 301 handicrafts clusters, and 563 handloom clusters. According to the assessments of the Ministry of MSME, Government of India, the sector generates around 100 million jobs through over 46 million units situated throughout the geographical expanse of the country.

MSMEs are transforming into a new business environment characterized by the emergence of national and global supply chains where they share a symbiotic relationship with hefty corporations.

Besides the wide range of services provided by the sector, the sector is further engaged in the engineering of over 6,000 products ranging from traditional to hi-tech items. The Indian MSME sector offers maximum opportunities for both self-employment and wage-employment outside the agricultural sector and contributes in constructing an inclusive and sustainable society in numerous ways through making of non-farm livelihood at meagre cost, balanced regional development, gender and social balance, environmentally sustainable development etc.

Many more rewarding opportunities can be tapped by Indian MSMEs in the foundry industry, electronics industry, chemicals, leather, textiles, agro and food processing, pharmaceuticals, transport and tourism industries, etc. The globalization of industries has gradually drawn SMEs into global value chains through diverse types of cross-border activities.

Micro, Small and Medium Enterprises constitute the backbone of an economy in maintaining an appreciable growth rate and in generating employment opportunities.