Why are MSMEs considered the backbone of the Indian economy?

MSMEs have been the backbone of the Indian economy💪🏻 They play a drastic role in promoting entrepreneurship. A revision in the Micro Small and Medium Enterprises (MSME) definition was announced under the Aatmanirbhar Bharat Abhiyan Scheme on May 13, 2020. The MSME sector is a vital part of the Indian economy. These small businesses play a huge role in the country’s GDP, exports, and employment opportunities📈 There are over 63 million MSMEs in India, employing over 113 million people 👩‍💼👨‍💼 which is around 40% of the workforce. They also contribute about 30% to the GDP and 45% to manufacturing output.

To support MSMEs, the Indian government provides loans, tax breaks, and training programs 💵

The categorization of MSMEs is based on the investment in the plant and machinery equipment:

➡️ Micro Enterprise: Investment in plant and machinery not exceeding Rs. 1 crore and annual turnover not exceeding Rs. 5 crore.

➡️ Small Enterprise: Investment in plant and machinery exceeding Rs. 1 crore but not exceeding Rs. 10 crore and annual turnover exceeding Rs. 5 crore but not exceeding Rs. 50 crore.

➡️ Medium Enterprise: Investment in plant and machinery exceeding Rs. 10 crore but not exceeding Rs. 50 crore and an annual turnover exceeding Rs. 50 crore but not exceeding Rs. 250 crore.

The MSMEs have huge potential to grow and survive for⬆️ the longest time in India as it promotes rural employment, business, and “Make in India”.

MSMEs or micro, small, and medium enterprises sector is expected to grow to 💰1 trillion by 2028. This makes India a great place to invest in industries like textiles, and agriculture. The government allows 100% foreign investments with tax benefits.

MSMEs are adapting digital transformations to enter global transformations. MSMEs are the next biggest pool of opportunities in India, contributing to an individual as well as the whole nation.

REFERENCES- https://www.ibef.org/industry/msme

Innovative MSMEs schemes- https://www.investindia.gov.in/schemes-msmes-india