Empowering India from the Ground Up: MSME Sector’s Expanding Role in India’s Economy under Azadi Ka Amrit Mahotsav
- Dr.Sanjaykumar Pawar
Table of Contents
- Introduction: MSMEs as the Bedrock of Indian Economy
- MSMEs and Azadi Ka Amrit Mahotsav: Celebrating Grassroots Empowerment
- MSME's Massive Economic Footprint
- Udyam Portal and Udyam Assist: A Digital Revolution
- Employment Boom: 28 Crore Jobs and Counting
- PM Vishwakarma Yojana: Nurturing India’s Traditional Artisans
- Credit Flow via CGTMSE: ₹9.8 Lakh Crore and Rising
- Rural Transformation through PMEGP
- MSME Samadhaan: Justice for Delayed Payments
- Technology, Innovation & Global Linkages
- Challenges Ahead: Financing, Formalization & Global Competition
- Way Forward: Policy, Support, and Sustainable Scale
- Conclusion: MSMEs Driving India's Inclusive Growth
- FAQs on MSMEs in India
1. Introduction: MSMEs as the Bedrock of Indian Economy
Micro, Small, and Medium Enterprises (MSMEs) are the unsung heroes powering India’s economic growth. Contributing nearly 30% to the GDP and employing over 28 crore people, the 6.5 crore MSMEs form the backbone of India's industrial ecosystem. From traditional handicrafts and textile units to innovative tech startups, MSMEs span both urban hubs and rural corners, driving inclusive development.
As India marks Azadi Ka Amrit Mahotsav, MSMEs reflect the spirit of Aatmanirbhar Bharat—self-reliant, resilient, and resourceful. Union MSME Minister Shri Jitan Ram Manjhi, speaking in Mumbai on July 4, 2025, emphasized the sector's pivotal role in achieving a $5 trillion economy. He highlighted how digital platforms, skill development, and targeted government schemes like UDYAM, ZED Certification, and PMEGP are transforming MSMEs into globally competitive enterprises.
These efforts aim not only to enhance productivity but also to integrate local businesses with global supply chains. In a world of rapid change, India’s MSMEs are proving that big impact doesn’t always require big size. Strengthening them means strengthening India’s future.
MSMEs aren’t just supporting the economy—they are the economy.
2. MSMEs and Azadi Ka Amrit Mahotsav: Celebrating Grassroots Empowerment
MSMEs and Azadi Ka Amrit Mahotsav: Celebrating Grassroots Empowerment
As India celebrates Azadi Ka Amrit Mahotsav, the spotlight is rightfully on MSMEs—the true drivers of grassroots empowerment. This nationwide campaign is more than a tribute to 75 years of independence; it’s a bold commitment to building an inclusive, self-reliant future led by micro and small enterprises.
The Ministry of MSME is spearheading initiatives that bridge tradition and technology. From reviving Khadi, coir, and handloom industries to digitally onboarding lakhs of entrepreneurs through Udyam Registration, the movement is unlocking new doors of opportunity. Programs like PM Vishwakarma uplift artisans with skill training, toolkits, and financial aid, while PMEGP (Prime Minister’s Employment Generation Programme) creates sustainable rural livelihoods.
These targeted efforts are empowering the last-mile entrepreneur, ensuring that every weaver, potter, and village startup has a stake in India’s economic journey. With over 6.5 crore MSMEs playing a key role in exports, employment, and innovation, the campaign reaffirms that true independence lies in economic participation for all.
MSMEs aren’t just participating in Azadi Ka Amrit Mahotsav—they are shaping India’s next century of growth.
3. MSME's Massive Economic Footprint
According to Shri Manjhi, MSMEs account for:
| Metric | Contribution |
|---|---|
| GDP | 30.1% |
| Manufacturing Output | 35.4% |
| Exports | 45.73% |
Micro, Small, and Medium Enterprises (MSMEs) are more than just a support system—they are a pillar of India's economic strength. As highlighted by Union MSME Minister Shri Jitan Ram Manjhi, the sector contributes a staggering 30.1% to GDP, 35.4% to manufacturing output, and 45.73% to India’s exports. These numbers aren't just statistics—they reflect livelihoods, innovation, and economic inclusion.
Ranked as the second-largest economic contributor after agriculture, MSMEs are vital to India’s economic resilience. From supplying essential components to large-scale manufacturers to crafting unique products for global markets, MSMEs operate at the intersection of production, consumption, and exports.
This sector also champions regional development, reduces urban-rural disparities, and promotes women and youth entrepreneurship. Whether it's a small weaving unit in Tamil Nadu or a precision tools manufacturer in Pune, MSMEs are building India's global competitiveness from the ground up.
Their footprint spans across 6.5 crore enterprises, creating jobs, driving demand, and ensuring that growth reaches every corner of the country. In a rapidly evolving global economy, MSMEs are India’s agile engines—flexible, innovative, and deeply rooted in local potential.
4. Udyam Portal and Udyam Assist: A Digital Revolution
India’s MSME digital transformation found its turning point with the launch of the Udyam Registration Portal on July 1, 2020. This game-changing platform has made enterprise recognition completely free, paperless, and self-declared, eliminating bureaucratic hurdles and empowering entrepreneurs across the country.
Fast forward to 2025, and the results speak volumes:
- 3.80 crore MSMEs registered under Udyam
- 2.72 crore informal enterprises brought into the fold through Udyam Assist
- Over 6.5 crore MSMEs now officially recognized
This digital leap has had a profound economic and social impact. By simplifying formal registration, the platform enables MSMEs to access bank credit, participate in government procurement, and avail schemes and subsidies with ease. It also enhances data transparency, helping policymakers design more targeted support systems.
Udyam Assist especially shines by onboarding nano and informal enterprises—street vendors, artisans, micro-retailers—giving them identity, access, and dignity in the formal economy.
With Udyam, India isn’t just digitizing processes—it’s democratizing opportunity. The platform is a cornerstone of the Aatmanirbhar Bharat vision, ensuring that even the smallest enterprise can dream big in the digital age.
5. Employment Boom: 28 Crore Jobs and Counting
India’s MSME sector is powering an employment revolution. With over 6.5 crore enterprises spread across the country, MSMEs have generated a staggering 28 crore jobs, making them the second-largest employment provider after agriculture. What’s remarkable is that a majority of these jobs are in rural and semi-urban areas, bridging the urban-rural divide and driving inclusive growth.
This employment boom is incredibly diverse:
- Traditional artisans working in Khadi, coir, and handlooms
- Service-based MSMEs in IT, retail, logistics, and hospitality
- Women-led businesses and Self-Help Groups (SHGs) thriving in micro-enterprises
- Tech-oriented startups and small digital ventures leading innovation
In the last five years alone, there has been a 15x surge in MSME registrations, reflecting not just policy success but a surge in entrepreneurial confidence. Initiatives like Udyam Registration, PMEGP, and Skill India are fueling this momentum.
MSMEs are not just creating jobs—they’re building livelihoods with dignity, unlocking local potential, and empowering first-generation entrepreneurs. They represent the aspirations of a New India—bold, self-reliant, and employment-rich. Strengthening this sector means securing the economic future of millions.
6. PM Vishwakarma Yojana: Nurturing India’s Traditional Artisans
India’s rich tapestry of craftsmanship is being revitalized through the PM Vishwakarma Yojana, a landmark initiative dedicated to 18 traditional trades such as blacksmithing, carpentry, pottery, cobbling, and tailoring. These skilled artisans, often working in informal settings, are now receiving the recognition and support they deserve.
Under the scheme, beneficiaries receive:
- Comprehensive skill training to upgrade and modernize techniques
- Modern tool kits to boost productivity
- Digital onboarding for inclusion in the formal economy
- Access to marketing and e-commerce platforms for broader reach
- Collateral-free credit of ₹1–2 lakh at subsidized interest rates
The impact is profound. By preserving heritage livelihoods and offering modern-day support, PM Vishwakarma ensures that age-old skills don’t just survive—they thrive in a digital and competitive economy. Artisans are now becoming entrepreneurs, able to showcase their products nationally and globally.
This scheme is more than welfare—it’s economic justice for traditional communities, blending culture, dignity, and commerce. PM Vishwakarma Yojana is a powerful step toward an inclusive Aatmanirbhar Bharat, where every skill, no matter how old, finds a place in India’s future.
7. Credit Flow via CGTMSE: ₹9.8 Lakh Crore and Rising
Access to credit is often the lifeline for small businesses—and the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) has been a game-changer in this space. By offering collateral-free credit guarantees, it has significantly reduced lending risk for banks and empowered micro and small businesses to grow with confidence.
📊 Cumulative Achievements So Far:
- 1.18 crore+ credit guarantees approved
- Total guarantee coverage crosses ₹9.80 lakh crore
- In FY 2024–25 alone, approvals hit a record ₹3 lakh crore
This robust credit flow is enabling millions of entrepreneurs—especially first-generation business owners—to access much-needed working capital, invest in machinery, expand operations, and weather economic shocks.
🎯 With a goal to triple beneficiaries by 2029, CGTMSE is placing special focus on women entrepreneurs, SC/ST business owners, and enterprises in the North-East and hilly regions, ensuring inclusive financial growth.
CGTMSE is more than a credit scheme—it's a trust-building bridge between the smallest entrepreneur and the formal financial system. With rising approvals and broader outreach, it is paving the way for a stronger, self-reliant, and opportunity-rich MSME sector.
8. Rural Transformation through PMEGP
The Prime Minister Employment Generation Programme (PMEGP) is not just a scheme—it’s a lifeline for rural entrepreneurship in India. By offering credit-linked subsidies to aspiring entrepreneurs, PMEGP is creating a wave of self-employment and grassroots industrialization across the country.
📌 Key Achievements:
- Over 80.33 lakh people have benefited since inception
- 80% of the units are established in rural areas
- Focus on non-farm enterprises like food processing, handicrafts, agro-services, and small manufacturing
With a simple online application process, preference for backward and aspirational districts, and seamless integration with banks, PMEGP has opened doors for first-time business owners who once had little or no access to formal credit.
This initiative doesn’t just create jobs—it revitalizes village economies, encourages women and youth entrepreneurship, and reduces migration by generating sustainable local livelihoods.
PMEGP is transforming India’s rural landscape by nurturing self-reliant, community-driven growth. It aligns perfectly with the vision of Aatmanirbhar Bharat, proving that true economic empowerment starts not in boardrooms, but in the small workshops, kitchens, and farms of rural India.
9. MSME Samadhaan: Justice for Delayed Payments
Timely payments are the lifeblood of small businesses—and the MSME Samadhaan Portal, launched in 2017, has become a powerful tool for securing that right. It enables MSMEs to file complaints against delayed payments by buyers, including Public Sector Undertakings (PSUs) and government departments, offering a transparent, digital grievance redressal platform.
📉 Impactful Progress:
- In October 2017, pending cases stood at 93,000
- By July 2025, they have dropped to around 44,000, reflecting improved enforcement and resolution mechanisms
This reduction isn’t just about numbers—it’s about restoring financial dignity to small entrepreneurs. Delayed payments can cripple cash flow, hinder day-to-day operations, and even force shutdowns. By addressing these grievances, MSME Samadhaan is helping enterprises maintain stability, retain jobs, and focus on growth instead of litigation.
It also builds accountability among large buyers, encouraging fair business practices and trust in the formal system. The portal is a cornerstone of the government’s push to create a level playing field for MSMEs.
With every resolved case, MSME Samadhaan affirms that justice and ease of doing business go hand in hand, especially for India’s smallest and most vital enterprises.
10. Technology, Innovation & Global Linkages
The future of India’s MSME sector is being shaped by technology adoption, innovation, and global integration. No longer limited to traditional roles, MSMEs are now tapping into advanced manufacturing, digital tools, and international markets, thanks to proactive government support and industry partnerships.
🚀 Technology Adoption:
Through 18 MSME Technology Centres nationwide, enterprises are gaining access to cutting-edge machinery, digital training, and industrial automation tools—empowering them to upgrade and compete globally.
🔬 Innovation & R&D:
Collaborations with premier institutions like CSIR and ISRO are pushing MSMEs into high-tech domains. A shining example is IDEMI Mumbai, an MSME that manufactures critical components for India’s Chandrayaan missions—a clear signal that even space research values MSME expertise.
🌍 Global Linkages:
By participating in international expos, gaining ISO certifications, and undergoing export-readiness training, MSMEs are expanding their footprint in global supply chains. These efforts build credibility, boost foreign exchange earnings, and strengthen India’s image as a hub of quality innovation.
India’s MSMEs are not just keeping pace—they're leading the charge into the future, powered by smart technology, bold partnerships, and a truly global outlook.
11. Challenges Ahead: Financing, Formalization & Global Competition
Despite the incredible strides made by India’s MSME sector, several challenges still hinder its full potential. Many small businesses, especially in Tier-II and Tier-III cities, continue to struggle with low credit penetration. Without timely, affordable financing, these enterprises often remain stuck in survival mode rather than scaling up.
A large portion of MSME employment remains informal, lacking social security, health coverage, and legal protections, leaving workers vulnerable. Additionally, compliance burdens—such as frequent filings and complex paperwork—overwhelm small business owners with limited resources or digital literacy.
On the international front, export bottlenecks persist. Many MSMEs face difficulties in meeting global quality standards, securing ISO certifications, or navigating Free Trade Agreements (FTAs)—limiting their ability to expand into global markets.
To move forward, India needs a stronger MSME ecosystem built around:
- Mentorship for new entrepreneurs
- Digital literacy training
- Cluster-based support systems to foster shared infrastructure and innovation
Addressing these issues isn’t just about fixing problems—it’s about unlocking the next level of growth for Aatmanirbhar Bharat, where every MSME, no matter how small, can compete, thrive, and lead on the global stage.
12. Way Forward: Policy, Support, and Sustainable Scale
As India charts its course from 2025 to 2030, the MSME sector must be at the center of its economic strategy. The Union MSME Ministry’s vision must prioritize resilient supply chains, wider market access, and an inclusive, sustainable growth model.
A key focus should be on strengthening supply chains, especially post-pandemic, to ensure MSMEs can deliver reliably to both domestic and global markets. Green MSME initiatives must be scaled, encouraging the adoption of clean energy, waste management, and eco-friendly practices, which are essential for long-term competitiveness.
The rapid growth of ONDC and e-commerce platforms offers MSMEs a golden opportunity to reach national and global customers—bridging the rural-urban divide. Investing in digital skilling and Industry 4.0 adoption (AI, IoT, automation) will prepare small businesses for the future of manufacturing and services.
Another game-changing reform would be establishing a National MSME Credit Bureau, using alternate credit scoring to help informal and new businesses access finance without heavy collateral.
With targeted policy support, India’s MSMEs can evolve from being local job creators to global innovation leaders, driving sustainable growth and powering the vision of an Aatmanirbhar and Viksit Bharat.
14. Conclusion: MSMEs Driving India’s Inclusive Growth
Conclusion: MSMEs Driving India’s Inclusive Growth
India’s growth story is deeply rooted in the resilience and ingenuity of its Micro, Small, and Medium Enterprises (MSMEs). From the skilled textile weavers of Varanasi to cutting-edge drone startups in Bengaluru, MSMEs represent the diverse talent, innovation, and entrepreneurial spirit that fuels Azadi Ka Amrit Mahotsav.
These 6.5 crore enterprises are not just economic contributors—they are agents of social change, creating jobs, preserving traditions, empowering women, and uplifting rural economies. Their role in shaping an inclusive and self-reliant India cannot be overstated.
With continued policy support, digital transformation tools like Udyam and ONDC, and access to credit through platforms like CGTMSE and PMEGP, MSMEs are better equipped than ever to thrive in the global economy. The government’s focus on green growth, digital skilling, and formalization is laying a strong foundation for the sector to evolve.
As the world seeks resilient and diversified supply chains, India’s MSMEs offer a unique blend of scale, skill, and sustainability. Empowering them is not just an economic imperative—it is a national mission.
15. FAQs on MSMEs in India
Q1. What is the contribution of MSMEs to India’s GDP?
A: As of 2025, MSMEs contribute 30.1% to India’s GDP.
Q2. What is the Udyam Portal?
A: Udyam is a free, self-declared MSME registration portal launched in 2020 to promote formalization and ease of doing business.
Q3. How many people are employed by MSMEs?
A: Over 28 crore people, making MSMEs one of the largest job providers.
Q4. What is PMEGP?
A: The Prime Minister Employment Generation Programme is a credit-linked subsidy scheme for micro-enterprises, mainly in rural areas.
Q5. What support is available for artisans?
A: PM Vishwakarma provides financial, skilling, and digital support to 18 traditional trades.
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