Page 25 - Banking Finance April 2025

ARTICLE

Role of MSMEs in Economic Develop- The flourishing MSME sector fosters a culture of entre-
preneurship, inspiring individuals to start their own busi-
ment nesses and contribute to the economic landscape. Start-
MSMEs are the lifeline of the Indian economy. Their contri- up India, which is a flagship initiative of the Government
bution to India's Gross Domestic Product (GDP), foreign ex- of India, intended to catalyze startup culture and build
change earnings, the export sector, and most importantly, a strong and inclusive ecosystem for innovation and en-
employment generation is significant. trepreneurship. India is home to more than 100 unicorns
As per the latest information received from the Minis- with a total valuation of upwards of US$ 385 billion as
try of Statistics & Programme Implementation, the of 2024. (Source- ET 11.01.2025)
share of MSME Gross Value Added (GVA) in all India
Gross Domestic Product (GDP) for FY 2022-23 is 30.1%. How MSMEs will fulfill the vision of
This shows the significant share of MSMEs in the eco-
nomic pie, highlighting their crucial role in national Vikshit Bharat by 2047
growth. In the 21st century, technology is the driving force behind
progress, and 'Vikshit Bharat' envisions India as a techno-
MSMEs are competing in the global market and are
logically advanced nation. MSMEs, with their agility and
generating valuable foreign exchange reserves, which
is crucial for a developing country like India. As per the adaptability, are well-suited to embrace new technologies
information culled out from the Data Dissemination and drive innovation.
Portal of Directorate General of Commercial Intelli- They are increasingly adopting digital tools, automation, and
gence and Statistics (DGCIS), the share of export of data analytics to enhance their productivity, efficiency, and
MSME specified products in all India exports contribute competitiveness. Furthermore, MSMEs are playing a crucial
a whopping 45.79% of India's total exports for FY 2024-
role in developing indigenous technologies and solutions that
25 (upto may'2024).
cater to India's unique needs. By 2047, India aspires to be a
MSMEs manufacture a vast array of products across sec- global leader in technology and innovation. MSMEs, with
tors, encompassing over 8,000 + different categories. their innovative spirit and focus on technology adoption, will
Their product diversity is strengthening India's export be instrumental in achieving this goal.
basket and they are offering a wider range of goods to
the international market. 'Vikshit Bharat' is not just about economic and technological
MSMEs are the largest employment generators in In- progress; it also emphasizes environmental sustainability.
dia. As on 16.07.2024, the total employment reported MSMEs, with their resource efficiency and focus on local solu-
by the MSMEs on the Udyam Registration Portal (since tions, can play a significant role in protecting the environment.
01.07.2020 to 16.07.2024) is 20.39 crore (including in-
formal micro enterprises registered on Udyam Assist They are increasingly adopting sustainable practices, such
Platform). (Source- PIB) as waste reduction, energy efficiency, and the use of renew-
able resources. Moreover, MSMEs are contributing to the
Unlike large corporations, MSMEs are often located in
development of green technologies and solutions that can
rural and semi-urban areas. This not only promotes re-
gional development but also provides crucial employ-
ment opportunities for the local population, and thus
stopping rural-urban migration.

MSMEs offer significant opportunities for women entre-
preneurs. As of 31st January, 2024, around 20.50% of
MSMEs are owned by women, fostering female eco-
nomic empowerment and participation in the workforce.

MSMEs play a vital role in alleviating poverty by provid-
ing income opportunities for a large segment of the
population.

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