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Why MSMEs are the Pillars of Indian Economy?

Why MSMEs are the Pillars of Indian Economy?

The Micro, Small and Medium Enterprises (MSMEs) have contributed significantly to the growth of our nation in the last few years. The MSMEs have emerged as the backbone of the Indian economy by generating millions of job opportunities across the nation. Thus, the MSME industry has played a pivotal role in solving the problem of unemployment in the country.

A large number of youths are interested in entering the MSME industry. This is due to the low investment associated with it. The most important thing to start an MSME is an innovative idea. An MSME does not require many resources such as manpower, types of equipment, high-end infrastructure, advanced technology, etc. With limited resources, management of the business becomes easy and efficient.

In case of large establishments, a specialist is required for every departmental functioning because of its complex organizational structure. Whereas, a small enterprise doesn’t need to hire an external specialist for its management. The owners themselves can make decisions for the betterment of the enterprise. Therefore, an MSME can be run single-handedly.

The Government of India has also launched several programs to support MSMEs and other emerging businesses. As a result of this encouragement by the government, the MSMEs are flourishing at a faster pace. The Government also provides MSME loans and SME loans at comparatively lower interest rates to support those businesses financially. Apart from providing business loans, the Government of India has also initiated several projects to train the youths and enhance their entrepreneurial and vocational skills. However, in order to avail all these benefits from the government, it is necessary to register the MSME. The registration of small and medium scale industry can be done online as well as offline. The basic documents required for the registration of an MSME are personal aadhar number, industry name, address and bank account details. Some of the major benefits of MSME registration are stated as under:

  • Due to the MSME registration, bank loans become cheaper as the interest rate is reduced significantly.
  • Businesses registered under MSME become eligible for various tax rebates
  • Businesses registered under MSME are given higher preference for government license and certification.
  • It also allows credit for minimum alternate tax (MAT) to be carried forward for up to 15 years instead of 10 years
  • There are many government tenders which are only open to the registered MSMEs.
  • Availing credit becomes a hassle-free process.
  • Once registered, the cost of getting a patent done reduces, as many rebates and concessions are available.

The MSME industry contributes to an estimated 30 percent of the country’s GDP and is a significant helping hand for the Indian Economy. Currently, almost 65 million MSMEs are operating actively across the country, which is a great achievement for the nation.

The MSME industry continues to grow rapidly and in the upcoming years, MSMEs are expected to solve the financial issues of the nation.

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