Indian micro, small and medium enterprises (MSMEs) contribute around 30 per cent to India’s gross domestic product (GDP), constitute nearly 40 per cent of total exports and provide employment to about 11 crore people; more than half of them are located in rural India.
Despite challenges, the sector is the backbone of the nation’s economy. Experts at BW Emerging Business Summit & Awards also emphasised how small and emerging businesses play a significant role in the economy and have made major contributions to the socioeconomic growth of the nation through job creation, especially in rural and underdeveloped regions.
Nirupama Soundararajan, Partner, Policy Consensus Centre said that one of the biggest opportunities the MSME sector has been seen taking advantage of is e-commerce in the country. It has fuelled growth for them in multiple ways by providing them with a certain amount of market access that they didn’t have before. However, if one looks at the total number of MSMEs who are enrolled on ecommerce platforms is still low, she added.
“After the change in definition of MSME now they consist of 99 per cent of the Indian corporate. I run an investment banking company in which there is one thing we do we help companies in raising money. We act as an intermediary between the financial institutions who are giving the money and corporates who are looking for money. There is a lot of trust deficit between the two sides. The challenge lies in how we can reduce the trust deficit,” said Jyoti Prakash Gadia, Managing Director, Resurgent India.
Notably, the gross value added by the nation’s 6.3 billion strong MSMEs has increased to 30 per cent of the GDP. According to data released by the MSME ministry in a statement, the proportion increased to 29.2 per cent in FY22 after falling to 27.2 per cent in FY21 from 30.5 per cent in FY20 and FY19. From 29.25 per cent in FY17 to 29.69 per cent in FY18, the share had grown.
On opportunities and challenges in the MSME sector, Raman Aggarwal, Director, FIDC said, “As a lender, I feel the biggest challenge in the MSME sector is lack of awareness. Real awareness needs to be created as to what is the right way to go ahead which is the right channel to seek credit. Further, the biggest opportunity for this sector is that the government is putting a lot of emphasis on this sector.”
Talking about the hurdles faced by the industry, Nabomita Mazumdar, President of India Awardee, Founder, Nabomita.com and National Chairperson, CIMSME said that the funds are the biggest challenge for the MSME sector. “We are part of an initiative of the National Stock Exchange. It’s called Social Stock Exchange this allows an MSME to list itself and raise funds in a completely different way, she added”
Meanwhile, Koel Ghosh, Head, Strategic Initiatives, ETF Junction termed technology and talent as the biggest challenge and opportunity for the MSME sector. “We have a lot of technological advancement today. In India we have technology and we have talent but the only thing we need to do is messing them together and putting them to use,” Ghosh added.
