In the Rajya Sabha, the Minister of Micro, Small, and Medium Enterprises announced that the Udyam and Assist portals have provided employment to a whopping 340 million individuals.
Boosting India's MSME Sector: A Comprehensive Overview
India's Micro, Small, and Medium Enterprises (MSMEs) have witnessed significant growth and transformation over the years, becoming a vital pillar of the country's economy. As of mid-2025, the number of MSMEs in India stands at over 6 crore, contributing nearly 30% to the nation's GDP and employing about 120 million people.
The MSME sector's growth trajectory can be traced back to 2007, when the Ministry of Micro, Small, and Medium Enterprises was formed by merging the Ministry of Small Scale Industries with the Ministry of Agro and Rural Industries. Since then, the government has introduced numerous reforms to broaden MSME definitions, digitize registration processes, and launch quality certification programs to help MSMEs meet global standards and improve productivity.
One of the most notable achievements has been the substantial expansion of credit to MSMEs. Between 2020 and 2024, MSME loan portfolios grew 17.8% year-on-year, reaching ₹64.1 trillion by March 2024. This growth indicates increased financial inclusion and lending support for these enterprises. The government has been proactive in addressing the significant credit gap exceeding ₹25 lakh crore by shifting lending paradigms toward cash-flow-based credit assessments rather than collateral.
Medium enterprises, in particular, have seen a marked improvement in accessing credit through scheduled banks, with the percentage increasing from 4% to 9% between specified years. However, there is no mention of the provision of customized credit cards for MSMEs in the reports.
MSMEs play a pivotal role in India's economic growth, not only through their substantial contribution to GDP but also as the second-largest employer after agriculture. They contribute 40–45% of India's exports, including textiles, engineering goods, chemicals, and agricultural products. Furthermore, they have expanded into various sectors like IT services, pharmaceuticals, renewable energy, and innovative start-ups, promoting economic diversification and technological upgradation.
The government has taken various initiatives to support MSME development, such as the Ministry of MSME, credit support schemes, infrastructure development, digital platforms and certifications, recognition and awards, and more. These initiatives are designed to nurture economic inclusivity, foster innovation, generate large-scale employment, and enhance export competitiveness.
Recent reports by NITI Aayog highlight the immense potential of India's MSMEs and propose systemic reforms in financing, skilling, innovation, and market access to unlock this potential. The government continues to focus on strengthening the MSME sector to promote inclusive growth, recognising it as the backbone of India's manufacturing and industrial growth.
Despite the challenges faced by MSMEs, the sector's growth and development are a testament to the government's commitment to fostering a conducive environment for these enterprises to thrive. With ongoing reforms and initiatives, India's MSME sector is poised to continue driving sustainable economic growth and contributing significantly to the country's socio-economic fabric.
Note: Data sources reflect updates as of mid-2025 and indicate ongoing reforms to optimize MSME contributions in India's socio-economic fabric[1][2][3][4][5].
References:
- Invest India
- Ministry of MSME
- NITI Aayog
- ET MSME Awards
- [Various Government Reports and Budget Speeches]
- To encourage innovation within the industry, the government has launched quality certification programs for MSMEs, helping them meet global standards and improve productivity.
- The growth of financial inclusivity in India's MSME sector is evident as the government has worked diligently to address the significant credit gap, shifting lending paradigms towards cash-flow-based credit assessments to foster business expansion.
