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MSME sector’s contribution to India’s GDP?

Posted on
Feb 05, 2021
MSME sector’s contribution to India’s GDP?

MSME or Micro, Small and Medium Enterprises is an evolving sector in terms of development for the Indian Economy. MSME is also known as India’s backbone because of its contribution to the Gross Domestic Product or GDP. It also generates tons of exports and employment for India as a whole. The MSME sector currently contributes thirty percent of GDP to the country. The government aims to increase the contribution to fifty percent.

In terms of exports, MSME contributes forty-eight percent and employs more than eleven crore people. MSME sectors mostly operate in rural India rather than urban. This sector further creates endless opportunities for development in rural areas.

Opportunities under MSME Sector

MSME comes with the tag “backbone of the Indian Economy.” It enhances economic growth by initiating many schemes and opportunities.

Employment Prospects

In terms of employment, MSME offers to balance regional divides in backward areas. The sector ensures equity in terms of income and wealth at a national level. Since the industry provides enormous employment opportunities, it is one of the most significant contributors to its social and economic structure.

In terms of the manufacturing outcome of MSME sectors, both traditional and technology-based products are produced. In addition to production, MSME provides training for employers to maximize productivity and enhance their skills at the same time.

Apart from employment, MSME helps build a more inclusive, sustainable society. This includes a safer space for gender roles, sociological balance, and environment-conscious livelihood.

Technologically Advanced

Most MSME Sector facilities are built to foster a fast-paced yet efficient way of learning. These centres are equipped with training tools for precise calculations, quick and easy working, and high-end products. Most of the centres help in training craftsmen for making tools.

MSME centres offer both theoretical and practical training. It helps expose the trainees to get hands-on experience when it comes to maximizing their skills. These training centres make sure to include international level programs to increase opportunities all over the world.

MSME Loans

Loans offered under the sector are linked to financial establishments. These establishments provide loans to meet business expenses. Most of these loans are not secured and are based on credit. MSME loans support businesses in finance, infrastructural, and development areas. The Reserve Bank of India is one institution under the government that can provide MSME loans.

Financial institutions that offer loans to the MSME sector link with government schemes to increase the benefit of the business –

Micro Unit Development and Refinance Agency, also known as MUDRA Loan, Prime Minister’s Employment Generation Programme (PMEGP), and Credit Guarantee Funds Trust for Micro and Small Enterprises (CGTMSE) are some of the schemes offered by the government.

In order to be eligible for the schemes, businesses must meet specific criteria.


The MSME sector is continuously evolving and paving the road of India towards global growth. Its engine is helping the developing country gain more control over what we thought was a slipping economy.

The opportunities provided by the MSME sectors are boundless. Besides loans and employment MSME also offers –

·         Funding and Subsidies to employees and trainees under the sector.

·         Machines are mostly updated for the smooth working of the industry.

·         Offers testing in laboratories for high-end products.

·         Increase export of the country by a notable feat.

·         Increase in the size of the domestic market. 

·         Reserves exclusive manufacture of products by small scale industries only.

Overall, the MSME sector has made significant contributions to India’s economy. With the growth, it helps rural India to build traditional skills by infusing it with technology. The training and practice offered under the MSME sector safeguard the future of Indians to a large extent.

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