World MSME Day: Why MSMEs are important for the Indian economy?

MSMEs are the backbone of many economies worldwide, contributing significantly to employment generation, innovation, and overall economic prosperity. Micro, Small, and Medium Enterprises (MSMEs) form a diverse range of businesses that operate within specific size thresholds. These enterprises play a crucial role in fostering entrepreneurship, startups and driving economic growth. Globally, MSMEs have a substantial impact, accounting for up to 90% of businesses, contributing to over 60% to 70% of jobs, and representing half of the global GDP, according to United Nations data. Join us as we explore the multifaceted impact of MSMEs and shed light on their immense importance for the global economy.

What is an MSME?

Micro, Small, and Medium Enterprises, commonly referred to as MSMEs, encompass a wide range of businesses that fall within specific size thresholds. The precise categorization of MSMEs may vary across countries, but they generally consist of enterprises with limited assets, workforce, and revenue. These enterprises play a pivotal role in fostering entrepreneurship and catalyzing economic growth.

What is the significance of MSMEs in global and Indian economies?

According to data from the United Nations, MSMEs constitute up to 90% of businesses, contribute to over 60% to 70% of jobs worldwide, and account for half of the global GDP.

In India, MSMEs play a strategic role in the country's economic development. They contribute nearly 33% to India's GDP and employ over 110 million people across approximately 63 million enterprises. Additionally, they are responsible for producing 45% of India's manufactured goods, contributing to over 50% of total exports. MSMEs in India manufacture over 8,000 products with added value, ranging from traditional to advanced tech items.

On April 6, 2017, the United Nations General Assembly designated June 27 as "Micro-, Small, and Medium-sized Enterprises Day" (A/RES/71/279). The purpose is to raise awareness of the significant contributions made by MSMEs towards achieving the United Nations Sustainable Development Goals (SDGs).

World MSME Day 2023 Theme

Theme The theme for MSME Day 2023 in India is "Future-ready MSMEs for India@100." The Global Council for the Promotion of International Trade is also celebrating the day with the theme "Building a Stronger Future Together" for this year. The global body is launching the #Brand10000MSMEs Network, which serves as a dynamic platform for MSMEs worldwide to connect, learn, and grow together.

How is World MSME Day 2023 being celebrated in India?

World MSME Day 2023: In India On June 27, 2023, the Ministry of MSME is celebrating 'Udyami Bharat-MSME Day' at Vigyan Bhawan, New Delhi, in honor of World MSME Day. During this event, the Ministry will launch several initiatives to support the growth and development of MSMEs. This includes the CHAMPIONS 2.0 Portal and Mobile App for Geo-tagging of Cluster Projects and Technology Centers. The program will also announce the results for the 'MSME Idea Hackathon 2.0' and launch 'MSME Idea Hackathon 3.0' specifically for Women Entrepreneurs. The objective of this celebration is to improve the business environment for MSMEs, foster innovation and the development of new products and services, promote regional development, reduce regional disparities, create market opportunities in domestic and global markets, and encourage the adoption of sustainable practices by MSMEs.

What is the purpose of the MSME Day event?

The purpose of the MSME Day event is to highlight the pivotal role played by MSMEs and explore opportunities for their further advancement. These events provide a platform for small business owners to share their entrepreneurship stories and challenges. Moreover, governments, international organizations, and business support organizations demonstrate their commitment to supporting MSMEs.

How do MSMEs help in Employment Generation?

One of the key contributions of MSMEs is their ability to generate employment opportunities. Small businesses often act as a breeding ground for job creation, absorbing a significant portion of the workforce. By providing diverse employment prospects, MSMEs empower individuals, alleviate poverty, and enhance the overall standard of living within communities.

MSMEs serve as hotbeds for innovation and entrepreneurship. Due to their relatively smaller size and agility, these enterprises are well-positioned to adapt to changing market dynamics and embrace emerging technologies. This adaptability fosters innovation, propelling industries forward and fostering a culture of entrepreneurship within societies.

Economic Contribution

MSMEs make substantial contributions to national and global economies. Despite their individual small-scale operations, the collective impact of MSMEs is formidable. These enterprises facilitate economic growth by stimulating demand, promoting local production and consumption, and driving exports. The resilience and adaptability of MSMEs enable them to thrive in diverse market conditions, making them a critical driver of economic development..

What are the Challenges for MSMEs?

While MSMEs play a vital role in economic development, they face numerous challenges in their day-to-day operations. Limited access to finance, lack of infrastructure, bureaucratic hurdles, and skill gaps are some of the common obstacles encountered by these enterprises. Overcoming these challenges requires targeted support and comprehensive policies that foster a favorable business environment.

Policy Interventions

Governments and regulatory bodies worldwide recognize the significance of MSMEs and have implemented various support measures to bolster their growth. These interventions include simplified business registration processes, streamlined access to credit and finance, capacity building programs, and favorable taxation policies. By addressing the specific needs of MSMEs, policymakers aim to create an enabling ecosystem for their sustained success.

The World MSME Day serves as a reminder of the invaluable contributions made by Micro, Small, and Medium Enterprises to the global economy. From employment generation to innovation and regional development, MSMEs are the driving force behind economic growth and vitality. Recognizing their importance, it becomes imperative for governments, businesses, and society as a whole to foster an environment that nurtures and empowers these enterprises. By providing the necessary support and creating conducive policies, we can unlock the full potential of MSMEs, paving the way for a prosperous and inclusive future.