The world is observing International Micro, Small and Medium Enterprises (MSME) Day on 27 June 2019. According to the Ministry of MSME (Micro, Small and Medium Enterprises), MSME’s involved in manufacturing and production of goods are defined as:
- Micro enterprise: An enterprise where investment in plant and machinery does not exceed ₹ 25 lakh;
- Small enterprise: An enterprise where the investment in plant and machinery is more than ₹ 25 lakh but does not exceed ₹ 5 crores;
- Medium enterprise: An enterprise where the investment in plant and machinery is more than ₹ 5 crore but does not exceed ₹ 10 crores.
Micro, small and medium-sized enterprises hold a significance presence in the economic microcosm of the world as they account for more than 90% of all businesses and around 70% of jobs worldwide – playing a pivotal and substantial role in stimulating economic growth and providing employment for economic vulnerable social groups such as women, young entrepreneurs, and poor communities.
MSME’s have been described as the backbone of the economy and are grassroots of entrepreneurial talent. In Indian context, the role of MSME’s in a developing economy like India is multi-layered and significant. It helps to generate employment, creating economic activity besides promoting allied development activities like entrepreneurial investment and infrastructural enhancement in the economic context.
Some key aspects of MSME in India are:
- MSME’s account for 35% of the gross value of the manufacturing sector’s output, about 80% of the total industrial employment, and about 40 % of India’s total export surplus.
- They contribute more than 50% of the total manufacturing output and the employment generation is more than five times that of the large enterprises.
- Employment generation is the key aspect of MSME in India. MSME’s are labour intensive and therefore generate widespread employment opportunities. Unexplored talent is sourced, trained, and gainfully employed by the sector.
- MSME’s have the capability to innovate and commercialize a product at a much lower cost compared to commercial manufacturing. MSME’s provide ample opportunities for the development of technology which in turn creates favourable growth for entrepreneurial endeavours.
India’s 2030 development agenda for MSME’S in accordance with United Nations Sustainable Development Goals (SDGs) of the 2030 Agenda recognizes the importance of MSME’s in the economy and calls for action to improve their access to finance, value chains and markets. MSME Day 2019 is dedicated to raising awareness of the need for greater investment into small and mid-sized businesses in developing countries.
It also celebrates the gigantic contribution small entrepreneurial pursuits make to the global economy.