The report covers key challenges faced by MSMEs such as access to finance, technology adoption, competition, compliance, market access, infrastructure, supply chain, and skilled labour availability across 19 sectors in manufacturing, services, and trading.
Contribution of MSMEs to Economy
- Contribution in Gross Value Added: 30.1% in FY2022-23.
- Contribution in exports: 45.79% in FY2024-25 (up to May 2024).
Major Challenges in MSME Sector
- Inadequate access to credit: Due to lack of formalization, insufficient credit history, lack of awareness of credit schemes, inability to tap into capital markets given required transparency and regulatory norms, etc.
- High competition and technology adoption: Rapidly evolving business landscape and need to adopt new technologies is a major challenge, as many MSMEs lack resources and expertise to leverage technology.
- Others: Complex regulatory landscape, inadequate infrastructure, unreliable and costly supply of utilities, difficulty in sourcing raw materials and skilled manpower.
Key initiatives for MSMEs
- Union Budget 2025-26: Revised classification of MSMEs (refer infographic), Credit Cards for Micro Enterprises, setting up of a new Fund of Funds, enhanced Credit Guarantee, National Manufacturing Mission to support Clean Tech manufacturing, etc.
- MSME Developmental Schemes: Credit Guarantee Scheme for Micro & Small Enterprises, new Credit Assessment Model for micro and small enterprises based on their digital footprints which was announced in Union Budget, July 2024, etc.
