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Importance and Impact of MSMEs on the Indian Economy

ajvaemsme

August 31, 2024

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The Indian economy thrives on its youthful population and entrepreneurial spirit, with MSMEs playing a crucial role. The “Make in India” initiative by the Modi Government, focusing on manufacturing and services, is designed to boost entrepreneurship. MSMEs contribute 8% to GDP, 45% of manufacturing output, and 40% of exports, offering high returns with minimal investment. This initiative is underpinned by four key pillars to enhance the entrepreneurial landscape across India.

New Processes

‘Make in India’ attempts ‘ease of doing business’ for the MSMEs as the single most important factor to promote entrepreneurship. The aim is to automate, fasten and make the processes to be seamless by bringing it at a single point.

New Infrastructure

Availability of infrastructure is a very important requirement for the growth of any industry which MSMEs are often deprived of. Here the aim is that the existing infrastructure gets strengthened through upgradation of infrastructure.

New Sectors

25 sectors in manufacturing, infrastructure and service activities have been identified in ‘Make in India’ and detailed information is being shared through interactive web-portal and professionally developed brochures. FDI has been opened in Defense Production, Construction and Railway infrastructure in a big way.

New Mindset

To industries it is usual to see Government being the regulator and not a companion on the road to success. ‘Make in India’ aims to change this mindset by bringing a shift in how Government is perceived by the industry. The Government shall partner industry in the economic development of the country. The approach will be that of a facilitator and not a regulator.

To achieve the success of ‘Make in India’ movement, MSMEs are the most easy and best target.