Overview of Medium Enterprises in India

India's growth has been significantly driven by its micro, small, and medium enterprises (MSMEs). However, medium enterprises, a crucial subset of this category, have not received adequate policy attention despite their substantial contributions.

Significance of Medium Enterprises

• Statistic: Medium enterprises form only 0.3% of all MSMEs.
• Contribution: They account for 40% of MSME export income.
• Industries: Present in sectors like pharmaceuticals, auto components, and services.
• Economic Impact: Each medium enterprise generates over ₹39 crore in foreign-exchange income, employs nearly 90 people, and invests ₹2.07 crore in R&D on average.

Challenges Faced by Medium Enterprises

The existing policy framework disproportionately favors micro and small enterprises, leading to a "missing middle" phenomenon. This results in:

• Lack of incentive to scale up or formalize.
• Limited innovation and productivity.

Policy Recommendations

To address these challenges, a multipronged policy approach is recommended:

• Financial Support:
  • A credit card facility with a ₹5 crore pre-approved limit.
  • New working capital schemes to meet capital requirements.
• Technological Integration:
  • Transform Technology Centres into "India SME Competence Centres" for Industry 4.0 applications.
• Research & Development:
  • Establish a dedicated R&D cell under the MSME ministry to support cluster-specific R&D projects.
• Cluster Development Programme:
  • Extend this to include medium enterprises for better access to testing, certification, and compliance facilities.
• Digital Portal:
  • Create a centralised portal for streamlined access to schemes, compliance information, and market research.

Conclusion

Without targeted interventions for medium enterprises within the MSME sector, India's manufacturing and export ambitions may be hindered. Addressing financial and innovation barriers is crucial for their growth and participation in global value chains.