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Udhyam Portal has been launched by Ministry of Micro, Small and Medium Enterprises(MSME) to register and classify enterprises as micro, small and medium enterprises.
Status of MSME Sector
- High growth in registered MSMEs: from 2.33 crore (August 2023) to 5.49 crore
- Employment boost: from 13.15 crore to 23.14 crore jobs (5.23 crore jobs of which are held by women)
Significance of MSMEs
- Economy: contributes around 30% to India's GDP, ~46% of India’s total exports
- Regional Development: decentralize economic activity, promoting balanced growth in rural and semi-urban areas.
- Diversification: reducing reliance on a single industry by operating across various sectors
- Supports large-scale Industries: by adding value with specialized products and services.
Steps taken by the government
- Collateral-Free Loans: MSMEs can now access loans up to Rs. 500 lakh with 85% guarantee coverage under the Credit Guarantee Scheme
- Composite formula of classification for manufacturing and service: It does away with the difference between manufacturing and service sector and a new criterion of turnover is added.
- Public Procurement Policy: It mandates 25% of annual procurement by Central Ministries from Micro and Small Enterprises
- PM Vishwakarma Scheme: to provide support to traditional artisans and craftspeople and integrate them into domestic and global value chains.
Challenges faced by MSMEs in India
Lack of formalization & Inclusion, limited access to affordable credit and capital, lack of access to technology, and digital tools, infrastructural bottlenecks
