The MSME sector in India has significantly boosted the economy. In FY20, over 6.3 Cr MSMEs spread across the country contributed 30% to India’s GDP. It also resulted in numerous job opportunities. MSMEs, as opposed to large corporations, aided in the industrialization of rural areas at a low capital cost. The sector has made significant contributions to the country’s socioeconomic growth while also supporting major industries. MSMEs account for roughly 40% of total exports in India, 6.11 percent of GDP in the manufacturing sector, and 24.63 percent of GDP in the services sector.
PM Modi launched the ‘Raising and Accelerating MSME Performance’ (RAMP) scheme, the ‘Capacity Building of FirstTime MSME Exporters’ (CBFTE) scheme, and new features of The RAMP scheme that will cost around Rs 6000 crore. The Government of India contributed USD 308 million, and the World Bank loaned USD 500 million for the programme. It aims to increase the capacity and coverage of MSMEs in the states while improving the impact of existing MSME schemes. It will tribute the Aatmanirbhar Bharat mission by fostering innovation, encouraging ideation, incubating new businesses, and fostering entrepreneurship by developing quality standards, improving practises and processes, increasing market access, deploying technological tools, and implementing Industry 4.0 to make MSMEs competitive and self-sufficient.
The programme through enhanced collaboration with States, will be a job-enabler, market promoter, finance facilitator, and will support vulnerable sections and greening initiatives. Another scheme, the ‘Capacity Building of First-Time MSME Exporters’ scheme, was launched with the goal of encouraging MSMEs to offer international-standard products and services to the global market. This will increase Indian MSMEs’ participation in the global value chain and assist them in realising their export potential. Furthermore, the Prime Minister will unveil new elements of the “Prime Minister’s Employment Generation Programme.”. The scheme includes increasing the maximum project cost in the manufacturing sector to Rs 50 lakhs (from Rs 25 lakhs previously) and the maximum project cost in the service sector to Rs 20 lakhs (from Rs 10 lakhs previously), as well as including applicants from aspirational districts and transgenders in the Special Category applicants for higher subsidies.Micro, small and medium enterprise is showing signs of revival, supported by significant growth in lending by PVBs. The aggregate GNPA ratio in the MSME sector (public and private sector banks) has decreased from 11.3 percent in September 2021 to 9.3 percent in March 2022.