MSMEs contribution in Indian Economy

Published: 15th Nov, 2019

It produces about 45 per cent of manufacturing output and 40 per cent of the total exports.
About 80 million persons are engaged in over 29 million units.
MSMEs account for more than 80 per cent of the total industrial enterprises in India creating more than 8000 value added products.
It had also helped in industrialization of rural and backward areas, thereby, reducing regional imbalances, assuring more equitable distribution of national income.
Small industries also help the large industries by supplying them ancillary products. Modern products account for more than 95 per cent of the MSME exports especially in the sports goods, readymade garments, plastic products etc.
The contribution of manufacturing MSMEs in the country’s total manufacturing gross value of output has also remained at about 33 per cent during last five years.
Besides the wide range of services provided by the sector, the sector is engaged in the manufacturing of over 6,000 products ranging from traditional to hi-tech items.

Boosting Economy through MSMEs:

As India is a labor abundant country, the MSMEs are thought to have lower capital-output and capital-labour ratios as compared to large-scale industries, and therefore, better serve growth and employment objectives.
The employment intensity of MSME is estimated to be four times greater when compared with other large enterprises. The MSMEs generate the highest employment per capita investment; they also go a long way in checking rural-urban migration by providing people living in isolated areas with a sustainable source of employment.