An Overview of Recent Developments in Micro Small and Medium Enterprise Sector

Micro Small and Medium Enterprise Sector (MSMEs) has emerged as a highly vibrant and
dynamic sector of the Indian economy contributing significantly to employment generation,
innovation, exports and inclusive growth of the economy. The MSMED Act, 2006 was enacted
to provide enabling policy environment for promotion and development of the sector by way of
defining MSMEs, putting in place a framework for developing and enhancing competitiveness of
the MSME enterprises. MSME sector is called the backbone sector of Indian economy as it
provides employment to over 111 million people and produces 8000 products ranging from
traditional to high tech precision items. There are 63.4 million MSMEs in India which
contribute more than 28% to India’s GDP, about 45% to manufacturing output and 49% of its
exports. Despite the importance of MSME in Indian economic growth, the sector is facing
various challenges and does not get the required support from the concerned government
departments, banks, financial institutions and corporate sector which prove to be a hindrance in
the growth of MSME. In recent years, government is running numerous schemes which are
easing out the regulations, enabling credit access, running skill development training programs,
providing infrastructure facilities and facilitating the mechanism to boost potential of MSME
sector. This paper closely analyses the growth and development of MSME sector over the years
as well as recent developments in the sector. It is very important to continuously develop and
make policy effective so that it can support development of new era for entrepreneurs who have
the potential to create globally competitive economy and carry India’s 5 trillion dollar economy
goal on their shoulders.

Presented By:
Dipshi Goyal
Assistant Professor
Kamla Lohtia Sanatan Dharam College, Ludhiana
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