b-updated, msme, business, role


The Micro Small and Medium Enterprises make up over 90% of total enterprises in most of the economies and generate the highest rates of employment. It also account for a major share of industrial production and exports. The MSMEs play an important role in the growth of industrial economy of the country.Indian Economy is no exception. In India, the micro small and medium enterprises is considered as the engine of growth and for facilitating equitable development in the country. The component of employment of labour in this sector is much higher than that of the large enterprises.

Present Policy Framework: 

The Micro, Small and Medium Enterprises Development (MSMED) Act, 2006 facilitates the development of these enterprises and enhancement of their competitiveness. It provides the legal framework for recognition of the concept of “enterprise”, which comprises both manufacturing and service entities. It defines medium enterprises and seeks to integrate the three tiers of these enterprises, namely, micro, small and medium. It also provides for a State monitored administration at the national level with representation of all sections of stakeholders, particularly the three classes of enterprises

Employment Opportunities:

MSME sector in India creates largest employment opportunities for the population next only to agriculture. It has been calculated that an investment of approx. Rs 1 lakh in fixed assets in SSI sector creates employment for four persons. Not only this, the MSMEs also help in Industrialization of rural areas, reducing regional imbalances and assuring more equitable distribution of national income and wealth.

In fact, this sector is complimentary to the large industries and contribute largely towards the social and economic development of the country.  The MSME contributes significantly to manufacturing output, exports and employments of the country. In terms of value, the sector accounts for about 45% of the manufacturing and 40% of total exports of this country. It is estimated to employ about 6 Crore persons in over 2.6 Crore units throughout the country. There are over 6000 products ranging from traditional to high-tech items, which are being manufactured by 35 categories of MSMEs in India. It is well known that the MSME sector provides maximum opportunities for both self-employment and wage-employment, outside agriculture sector. MSME sector contributes not only to higher rate of economic growth but also in building an inclusive and sustainable society in countless ways through creation of non-agriculture livelihood at low cost, balanced regional development, gender & social balance, environmentally sustainable development and to top it all, proofing of recession in economic growth which the sector has proved time and again.


 The opportunities in the MSMES are extensive due to the following factors:

  • Less Capital Intensive
  • Extensive Promotion & Support by Government
  • Reservation for Exclusive Manufacture by MSME
  • Funding – Finance & Subsidies 
  • Project Profiles
  • Raw Material Procurement
  • Machinery Procurement
  • Technical & Managerial skills
  • Tooling & Testing support
  • Manpower Training
  • Export Promotion
  • Growth in demand in the domestic market size for products and services of MSME.
  • Reservation of items for exclusive purchase by government
  • Increasing Export Potential for products and services.
  • Growth in Requirements for ancillary units.

The promotional and protective policies of the government have ensured the presence of MSME in an unbelievable range of products, especially in consumer goods. However, the handicap of the sector has been the inadequacies in capital, technology and marketing. The process of liberalization along with Government support will attract the infusion of just these things in the sector. The MSME sector has performed remarkably well and enabled our country to achieve a wide measure of industrial growth and diversification. By its less capital intensive and high labour absorption nature, the sector has made significant contributions to generate employment and increase rural industrialization. This sector is optimally suited to build on the strengths of our traditional skills and knowledge, by introducing latest technologies, easy capital and innovative marketing practices. 

Tags : businesseconomyenterprisegrowthincomeIndian economymoneymsmemsmed actmsmed act 2006small enterprisesmall scale industriesSSIwealth
Aman Popli

The author Aman Popli

Chief Executive Officer at Ebslon Infotech with a demonstrated history of working in the Information Technology and Services Industry. Aman is professionally skilled in Search Engine Optimization (SEO), Website Designing and Development, Mobile Application Design and Development, Graphic Designing, Microsoft Excel, Microsoft Word, and Entrepreneurship.

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