It compared the productivity of MSMEs in states that have undertaken digitalisation reforms.
- States that implemented more of these reforms recorded higher total factor productivity.
- Total Factor Productivity is a measure of an economy’s ability to generate income from inputs- to do more with less.
Significance of MSMEs
- Economic: Contribute ~30% to India's GDP and account for ~35% of the country's manufacturing output.
- Employment Generation: responsible for ~60% of total employment in India.
- Export Promotion: account for ~45% of India’s total exports (in 2023-24).
- Rural Revitalization: Agri-based and rural MSMEs strengthen village economies and curb distress-driven migration by creating local opportunities in agro-processing.
- Women Empowerment: Women-led MSMEs drive gender-inclusive growth and social mobility.
Government Initiatives for MSMEs:
- PM Vishwakarma Scheme: to enhance the quality and reach of products and services by artisans and craftspeople, integrating them into domestic and global value chains.
- Prime Minister’s Employment Generation Programme (PMEGP): to provide employment opportunities through establishment of micro-enterprises in the non-farm sector.
- Scheme of Fund for Regeneration of Traditional Industries (SFURTI): to organize traditional artisans into collectives or clusters.
- Public Procurement Policy for Micro and Small Enterprises: mandates that 25% of annual procurement by Central Ministries and Central Public Sector Enterprises (CPSEs) must be sourced from MSEs.
