MSMEs hold the key to $5-trn economy

A proactive and cohesive approach by the government to support micro, small and medium enterprises could raise their contribution to GDP to about 50 per cent in the foreseeable future

India’s ambitious target of expanding its economy to $5 trillion in the next three years will depend to a large extent on the ability of policymakers to unleash the animal spirits of micro, small, and medium enterprises (MSME), which play a pivotal role in employment generation and sustainable development.
 

According to the World Bank, MSMEs account for 90 per cent of businesses, 60-70 per cent of employment and contribute over 50 per cent of global GDP.  However, in India, their contribution was around 29 per cent of GDP in 2022. The FY22 Annual Report of the Ministry for MSMEs says