Supporting micro enterprises to become 3rd largest economy

India has come a long way from being the 13th largest economy at the turn of the century to 5th largest economy today and it is poised to become the 3rd largest economy by 2030, as per estimates by leading economists.?

Micro, small and medium enterprises (MSMEs) play a critical role in this phenomenal economic growth, although their share in certain economic indicators have declined in recent years. Today, MSMEs contribute more than 25% to Indian economy’s gross value added (although this share has declined from 30% in FY19 to 26% today) and they account for 42% of exports (although this share has declined from 49% in FY20).?

Key Priorities?

As India marches to become the third largest economy by 2030, the contribution of MSMEs will become even more important. In order to support MSME sector and arrest their declining share in economic value added and exports, India may have to work on two priorities, viz. 1) to create more self-employed entrepreneurs, startups and micro enterprises, 2) to support scaling up of operations of existing micro and small enterprises so that they become medium sized entrepreneurs and reap economies of scale to become globally competitive.?

During his address at the 77th Independence Day, Hon’ble Prime Minister emphasized on promoting women-led entrepreneurship by announcing the intent to create two crore Lakhpati Didis in rural areas. The Prime Minister also introduced a new scheme, ‘Vishwakarma Yojana’, to empower weavers, goldsmiths, blacksmiths and other entrepreneurs pursuing traditional craftmanship.?

While Indian economy may grow in size, it is essential to ensure that this growth transforms the lives of common man by increasing their income and standard of living. We can achieve inclusive growth by promoting self-employed entrepreneurship, encouraging more farmer producer organisations and enhancing the global competitiveness of MSMEs.?