It is the backbone of Indian economy, nursery of enterprise & innovations and an important instrument for attaining inclusive and sustainable growth. The sector contributes 8% to GDP, 45% of the industrial output and 40% of exports through more than 57.7 million enterprises employing 120 million people. It is the invisible root feeding the survival of the majority of Indian population. It is diverse in terms of size, technology, location and range of 8000 products spanning from grassroots village industry to hi-tech components for satellites. If provided with the right financial & technological assistance, it holds the potential to achieve 20% GDP growth rate and make India Globally competitive. MSMEs are perhaps the most crucial link between India’s Economic growth & socio-economic transformation.
As per the ‘MSME at a Glance’ Report of the Ministry of MSMEs, the sector consists of 36 million units and provides employment to over 80 million persons. The Sector produces more than 6,000 products contributing to about 8% of GDP besides 45% of the total manufacturing output and 40% of the exports from the country.
The MSME registration is not statutory. However, the MSME registration process in India has been conceptualized to provide maximum benefits to all types of enterprises. After registration, any enterprise becomes qualified to reap the benefits offered under the MSMED Act. Some of the benefits from Central Government include easy sanction of bank loans (Priority sector lending), lower rates of interest, excise exemption scheme, an exemption under Direct Tax Laws and statutory support such as reservation and the interest on Delayed Payments Act.