It’s both inspiring and heartwarming to see the Government of India’s efforts in the direction of MSME growth. MSMEs are definitely the today and tomorrow of the economy, whose development will have a significant multiplier impact on India’s GDP. It contributes approximately 8% of India’s GDP, employs over 60 million people, and has an enormous share of 40% in the exports market and 45% in the manufacturing sector. Hence, they are of paramount importance in achieving India’s $5 trillion economy goal.
Even in MSME, the focus has to shift to small and medium enterprises as it is that part of India which has to have the spotlight now. It is where most of tier 2 and tier 3 cities’ business is, lower and lower-middle-class people work, and has the greatest participation of women and marginalized communities too. This sector will have a direct bearing on social empowerment.
If India has to become the global hub for innovation with its third largest startup ecosystem, as honorable Piyush Goyal has said, Small and Medium Enterprises(SME’s) are the place to start with. Dismally, Micro and small firms rarely engage in international trade (only 10-15% of them engage in trade in OECD countries) and, even though it adds to exports, their contribution to global trade and the global value chain is low.
As we can see, in emerging countries like India, small businesses make up seven out of ten formal jobs. Thus, small businesses do not merely contribute to the economy; they are the economy.