PROJECT REPORT

(Submitted for the Degree of [Link]. Honours in Accounts

& Finance under the University of Calcutta)

TITLE OF THE PROJECT

" Role of MSMEs in the Indian Economic Development "

SUBMITTED BY:
Name of the Candidate: SAYAN SEN
College Roll No:224468

CU exam Roll Number: 221043-21-0190

CU Registration Number:043-1111-0634-22
Name of the College: HERAMBA CHANDRA COLLEGE

SUPERVISED BY:
Name of the Supervisor: Prof. ISHIKA GHOSH
Name of the College: HERAMBA CHAMDRA COLLEGE

MONTH & YEAR OF SUBMISSION:

2025

1
Annexure- IA
Supervisor's Certificate
This is to certify that Mr. SAYAN SEN, a student of [Link]. Honours
in Accounting & Finance at HERAMBA CHANDRA COLLEGE under
the University of Calcutta, worked under my supervision and guidance for
his Project Work and prepared a Project Report titled "Role of MSMEs in
the Indian Economic Development."
To the best of my knowledge, the project report he is submitting is his
genuine and original work.

Signature:
Name: Ishika Ghosh
Designation: Professor
Name of the College: HERAMBA CHANDRA COLLEGE

Place: Kolkata

Date:

2
Annexure- IB
Student's Declaration

I hereby declare that the Project Work with the title Role of
MSMEs in the Indian Economic Development submitted by me
for the partial fulfillment of the degree of [Link]. Honours in
Accounting & Finance under the University of Calcutta is my
original work and has not been submitted earlier to any other
University/Institution for the fulfillment of the requirement for
any course of study.
I also declare that no chapter of this manuscript in whole or in
part has been incorporated in this report from any earlier work
done by others or by me. However, extracts of any literature
used for this report have been duly acknowledged, providing
details of such literature in the references.

Signature:
Name:
Address:
Place: Kolkata
Registration No:
Date:

3
 ACKNOWLEDGEMENT

It is difficult to acknowledge a debt as that of learning, as it is the only

debt that is difficult to repay except through gratitude. It is a matter of
great satisfaction and pleasure to present this report on “Role of
MSMEs in the Indian economic development”. I take this opportunity
to thank all my faculty members for their encouragement and able
guidance at every stage of this project. I am very thankful to my
supervisor, Prof. Ishika Ghosh, for her full support in completing this
project. I would also like to thank my parents, friends, and everybody
who helped directly or indirectly for their full cooperation &
continuous support during this assignment. They have always
encouraged me, which has persuaded me to work even better and
efficiently. This project is knowledgeable & memorable & will go a
long way in my career.

4
 TABLE OF CONTENTS

CHAPTER TOPIC PAGE NO.

Chapter- I 8-9
1.1 BACKGROUND
1.2 OBJECTIVES 9
1.3 GROWTH AND
10
PERFORMANCE
1.4 PRESENT POLICY 11
FRAMEWORK
1.5EMPLOYMENT 11
INTRODUCTION OPPORTUNITIES
1.6 MAJOR 12
CONTRIBUTION TO
GDP
1.7 LITERATURE REVIEW

13-14

1.8 ANALYTICAL 14

CHAPTER -2 2.1 CONCEPT 16

CONCEPTUAL 2.2 FINANCING OF 16-18

FRAMEWORK
MSME

2.3 OPPORTUNITIES 18-20

2.4 CHALLENGES 20-21

5
 3.1 CONTRIBUTION TO 22-24
INDUSTRIAL
PRODUCTION AND
EXPORTS
24-26
3.2 DISTRIBUTION OF
ENTERPRISES CATEGORY
WISE AND ACTIVITY WISE

3.3 OWNERSHIP OF 27-28

ENTERPRISES IN RURAL
CHAPTER – 3
AND URBAN AREAS

PRESENTATION, 29-30
ANALYSIS & 3.4 OWNERSHIP OF
FINDINGS ENTERPRISES, SOCIAL
CATEGORY WISE 31-33
3.5 OWNERSHIP OF
ENTERPRISES
EMPLOYMENT WISE
34
3.6 State-Wise Distribution of
Estimated MSME
35-38
3.7 AREAS TO BE
FOCUSED ON TO
STRENGTHEN THE MSME
SECTOR IN INDIA 38-39

3.8 STRATEGY
INTERVENTION FOR
REVITALIZATION AND 40-44
GROWTH OF MSMEs

3.9 STRATEGIES
ADOPTED BY THE
GOVERNMENT OF INDIA
FOR SUSTAINABLE
DEVELOPMENT AND
ENTREPRENEURSHIP

CHAPTER- 4 46-48
CONCLUSION CONCLUSION

CHAPTER- 5
BIBLIOGRAPHY REFERENCES 49-50

6
 CHAPTER 1
INTRODUCTION

7
1.1 Background

The micro, small, and medium enterprises (MSMEs) have been accepted as
the engine of economic growth and for promoting equitable development. The
labour intensity of the MSME sector is much higher than that of the large
enterprises. The MSMEs constitute over 90% of total enterprises in most of
the economies and are credited with generating the highest rates of
employment growth, and account for a major share of industrial production
and exports. The MSMEs play a vital role in the overall growth of the industrial
economy of the country.

The Micro, Small, and Medium Enterprises (MSME) sector has emerged as a
highly vibrant and dynamic sector of the Indian economy over the last five
decades. MSMEs not only play a crucial role in providing large employment
opportunities at comparatively lower capital cost than large industries, but also
help in industrialization of rural & backward areas, thereby reducing regional
imbalances, assuring more equitable distribution of national income and
wealth. MSMEs are complementary to large industries as ancillary units, and
this sector contributes enormously to the socio-economic development of the
country. Ministry of Micro, Small & Medium Enterprises (MSME) envision a
vibrant MSME sector by promoting growth and development of the MSME 2
Sector, including Khadi, Village and Coir Industries, in cooperation with
concerned Ministries/Departments, State Governments and other
Stakeholders, through providing support to existing enterprises and
encouraging creation of new enterprises.
In India, the enterprises have been classified broadly into two categories:

(i) Manufacturing; and

(ii) Those engaged in providing/rendering services.

8
Both categories of enterprises have been further classified into micro, small,
and medium enterprises based on their investment in plant and machinery (for
manufacturing enterprises) or on equipment (in the case of enterprises
providing or rendering services). The present ceiling on investment to be
classified as micro, small, or medium enterprises is as under:

CLASSIFICATIONS MANUFACTURING SERVICE

ENTERPRISES ENTERPRICES
Micro Up to Rs. 25 lakh Up to Rs 10 lakh

Small Above Rs.25 lakh and Above Rs.10 lakh

up to Rs.5 crore and up to Rs.2
crore
Medium Above Rs 5 crore and Above Rs.2 crore
up to Rs. 10 crore and up to Rs.5
crore

1.2 OBJECTIVES:
To evaluate the performance of MSMEs in terms of the number of units,
employment, and investment.

1. To analyze regional disparities through district-wise performance

data of MSMEs.
2. To identify key challenges faced by MSMEs.
3. To assess the contribution of MSMEs to India’s economic
development.
4. To propose strategies to overcome the challenges in the MSME
sector.

9
1.3 GROWTH AND PERFORMANCE

In recent years, the MSME sector has consistently registered a higher growth
rate compared to the overall industrial sector in India. During the first 4 years
of the XI Plan, the MSME Sector exhibited a growth rate of 13% on average,
an impressive performance compared to most of the other sectors. As per the
4th Census of the MSME Sector, this sector employs an estimated 59.7 million
persons spread over 26.1 million enterprises. It is estimated that in terms of
value, the MSME sector accounts for about 45% of the manufacturing output
and around 40% of the country's total exports. The major advantage of the
sector is its employment potential at a low capital cost. The sector has shown
remarkable resilience in the face of economic challenges and has emerged as
a critical pillar for inclusive and sustainable growth. With the implementation
of various policy measures and reforms by the Government of India, such as
the "Make in India" initiative, "Startup India," and the "Atmanirbhar Bharat
Abhiyan," the MSME sector has received a significant boost in terms of
support, visibility, and funding opportunities.

Technology adoption and digitalization have also played a key role in

improving productivity, market access, and competitiveness of MSMEs.
Furthermore, schemes like the Credit Guarantee Fund Trust for Micro and
Small Enterprises (CGTMSE) and MUDRA loans have enhanced credit flow
and financial inclusion within the sector.

Despite its growth, the MSME sector still faces challenges such as limited
access to finance, inadequate infrastructure, skill gaps, and regulatory hurdles.
Addressing these issues through coordinated efforts between government
agencies, financial institutions, and private stakeholders is crucial for
unlocking the full potential of MSMEs in driving economic growth, generating
employment, and fostering innovation across the country.

The continued performance and development of the MSME sector will be

instrumental in achieving India’s vision of becoming a $5 trillion economy, as
it contributes significantly to rural development, women entrepreneurship, and
balanced regional progress.

10
1.4 PRESENT POLICY FRAMEWORK

The Micro, Small, and Medium Enterprises Development (MSMED)

The Act, 2006, seeks to facilitate the development of these enterprises and also
enhance their competitiveness. It provides the first-ever legal framework for
recognition of the concept of “enterprise”, which comprises both
manufacturing and service entities. It defines medium enterprises for the first
time and seeks to integrate the three tiers of these enterprises, namely, micro,
small, and medium. The Act also provides for a statutory consultative
mechanism at the national level with balanced representation of all sections of
stakeholders, particularly the three classes of enterprises, and with a wide
range of advisory functions.

1.5 EMPLOYMENT OPPORTUNITIES

Employment opportunities are one of the important variables of the economic

growth of a country. Nowadays, the Arab world is facing the problems created
by its unemployed, unrest people. No economy can sustain itself unless and
until it provides a lively livelihood to its local people. Traditionally, the
MSMEs are labour-intensive and alleviate unemployment problems to a great
extent. The Indian MSME sector is the second-largest employment generator,
next to the agricultural sector. It employs about 101 million people and creates
4 million employment opportunities a year.
The number of MSMEs has been increasing steadily. In 1991, there were
only 67.87 lakh units, but it increased multi-fold by 2011- 2012. This change
might be the result of a conducive policy environment during the
liberalization era. As MSMEs are generally labour-intensive, employment
generation always follows the increase in the number of units. It seems to be
a boon to rural people as MSMEs do not demand highly skilled employees,
and semi-skilled and even unskilled people can be employed in such units.

11
1.6 MAJOR CONTRIBUTION TO GDP

The consistent contribution of MSMEs to GDP reflects their integral role

in fostering economic growth, promoting entrepreneurship, and generating
employment across various sectors. The government's initiatives, such as
digitization efforts, Udyam registration, and the Udyam Assist Platform,
have further facilitated the integration of MSMEs into formal economic
structures, enhancing their productivity and contribution to the economy.

According to the Press Information Bureau release dated July 22, 2024,
the contribution of the MSME sector to India’s GDP has shown
consistent strength over recent years. Between 2017–18 and 2022–23,
MSME Gross Value Added (GVA) has fluctuated slightly but remained
close to or above 30%. Despite a dip in 2020–21 due to COVID-19
disruptions (falling to 27.3%), the sector rebounded quickly to 29.6% in
2021–22 and 30.1% in 2022–23.
This trend reinforces the critical role MSMEs play in sustaining India’s
economic growth, particularly in key sectors like manufacturing, trade,
and services. Additionally, MSMEs contribute over 43% to India’s total
exports, underscoring their importance not only in the domestic economy
but also in global trade.
The following graph illustrates the year-wise contribution of MSMEs
to India's GDP from 2017–18 to 2022–23, clearly showing both the
sector’s resilience during economic disruptions and its strong recovery in
the post-pandemic period:

Graph showing MSME contribution to India’s GDP from 2017–18 to

2022–23

12
1.7 LITERATURE REVIEW
More studies have been conducted from time to time on the aspects of MSME
as a vibrant and dynamic tool for sustainable development. At the same time
the most of the studies are related to the growth of MSME, the role of MSME,
scheme performance evaluation, and so on.
Subramanyam and Reddy (2012) presented an overview of Micro, Small,
and Medium Enterprises (MSMEs) in India. The study analysed the
performance of MSMEs in India. It made a comparison of the growth of the
MSME sector with the overall industrial sector and also investigated the
sickness of MSMEs. The study found that the MSME sector has contributed
significantly to India’s Gross Domestic Product and export earnings. It also
found that sickness in Industry doesn’t occur overnight; rather, it takes 5 to 7
years to erode the health of an industrial unit.

Singh and Raina (2013) described the problems and challenges faced by
women entrepreneurs in India and also analysed the policies of the Indian
government for women. The study mainly focused on finding out the status of
women entrepreneurs in India. The study found that in modern India, more and
more women are taking up entrepreneurial activity, especially in MSMEs. It
also observed that Indian women have imprinted a position for themselves in
the male-dominated world. It further showed that Indian women can well
manage their household work as well as their workplace deadlines.

Jayan (2013) analysed women entrepreneurship in MSMEs and the

relationship between industry-related factors and the success of entrepreneurs
with special reference to Coimbatore city. The study identified that the factors
that motivate women to become successful entrepreneurs are achievement
motivation and human relations.

Rupali Sharma., Zia Afroz. (2014) examined the contribution of MSMEs to

GDP and identified the employment opportunities created by the MSMEs in
their study “Growth and Performance of MSMEs in the Present Scenario for
the Development of India”. The researcher found that the MSMEs are the
major contributors to the growth of the domestic economy and employment
generation.

13
Gilda Farajollahzadeh., Abdol Rahman Noorinasab., and Babak
Yazdanpanah. (2016) in their study “Role of MSME in Economic Growth
” studied the policy support and opportunities for MSME and examined
the growth and contribution of MSME in India, and they found various
assistance that was rendered by Ministry of MSMEs and other commercial
banks to develop the Indian economy and improve the employment
opportunities.
Rajamohan. S. and Sathish A. (2018) attempted “Micro,
Small and Medium Enterprise – Before and After the MSMED Act,
2006”. In their study, they systematically compared the MSME
performance before and after the enactment of the MSMED Act, 2006. The
number of registered units and the number of employments produced
before and after the enactment of the MSMED Act were studied by the
researchers, and they found that there was a significant difference in the
performance before and after the enactment of the MSMED Act, 2006.
Rajamohan. S. and Sathish A. (2019) in their study “MSME in India for the
Sustainable Societal Development” earmarked the significant role of MSME
in sustainable societal development. The study reveals that around 29 percent
share in the Indian GDP and 32 percent share in the GVA, and it occupies an
indispensable role in entrepreneurship development and employment
generation every year.

1.8 ANALYTICAL TOOLS

 For this study, a simple bar diagram and pie charts are used to show
and represent data to provide a better understanding of the available
data.
 The scope of the present study has been confined to the contributions
made by the MSME to the Indian economy. The data for the present
study have been collected from various Secondary sources, especially
from the annual report published by the Ministry of Micro, Small and
Medium Enterprises for various years.

14
 CHAPTER 2
CONCEPTUAL FRAMEWORK

15
2.1 CONCEPT

The MSMEs in India are playing a crucial role by providing large employment
opportunities at comparatively lower capital cost than large industries as well
as through industrialization of rural & backward areas, inter alia, reducing
regional imbalances, assuring more equitable distribution of national income
and wealth. As per the National Sample Survey (NSS) 73rd round, conducted
by the National Sample Survey Office,
Ministry of Statistics & Programme Implementation during the period
2015-16, there were 633.88 lakh unincorporated non-agricultural enterprises
in the country engaged in different economic activities (196.65 lakh in
Manufacturing, 0.03 lakh in Non-captive Electricity Generation and
Transmission, 230.35 lakh in Trade, and 206.85 lakh in Other Services)
excluding those MSMEs registered under
(a)Sections 2m(i) and 2m(ii) of the Factories Act, 1948,
(b)Companies Act, 1956 and
(c) construction activities falling under Section F of the National Industrial
Classification (NIC) 2008.

2.2 FINANCING OF MSMEs

Finance is the lifeline of any enterprise; India has one of the most extensive
banking infrastructures in the world. A large no. of MSMSs run only on the
promoters' investment, which severely limits their growth. In India, the
preferred mode of finance is either self or other private sources. But nowadays
MSMEs have started looking beyond traditional lending institutions like
banks, state financial institutions for supporting innovation and
commercialization of indigenously developed technologies. MSMEs have also
started some innovative finance options, which include:

a) Factoring Services: This combines sales–linked finance, bad debt

protection, payment collection, and transmission services that help
businesses compete with local suppliers on equal trading terms.

16
b) Micro credit: Provision of thrift, credit, and other financial services
and products of a very small amount to the poor in rural, semi-urban, and
urban areas.

c) Angel Investors: Angel investors are typically high-net-worth

individuals (HNIs) who have often been successful entrepreneurs
themselves. They redeploy their wealth in next-generation businesses.
They invest in new-idea enterprises (that do not yet have external
validation), help bring these ideas to market, take significant risks, and
invest a lot of time and energy in mentoring, management guidance, and
networking. Angel investors are also governed by considerations other
than finance alone, such as belief in entrepreneurship itself. Their time
horizons are limited and aimed at ensuring the availability of larger
institutional funding, mainly from VCs. In recent years, institutional seed
funds that perform the roles of sophisticated angel investors have also
emerged, bridging the gap between early-stage and growth-stage funding.

d) Venture Capital: Venture capital funding provides funds for early-

stage companies once they have passed the seed stage and report some
returns. VC investments are traditionally made for scaling up operations (i.e.,
developing, launching,
and expanding new
products or services).
VCs take lesser degrees
of risk and invest more
money than angel
investors. However, a
VC is about more than
financially based value-
addition, often in the
form of providing financial advice, human resources, establishing networks
with customers, and overall guidance in company strategy. In return, VCs
also retain a degree of control over decisions governing the company’s
functioning (e.g., through board seats and legal covenants, etc.), and usually

17
 look at fixed time horizons for predetermined exit, usually via a private equity
fund.

e) Private Equity: Private Equity (PE) funds are among the largest
sources of funding for enterprises that are relatively secure with an
established track record, requiring significantly large funds for expansion
and growth. PEs make capital investments in companies not yet quoted on
a stock exchange in exchange for equity and management participation. As
such, they take reasonably well-defined risks, and their exit strategy is
usually up to the stage when the company goes public or gets acquired at
a high value.

2.3 OPPORTUNITIES

a) Processing: The Indian Food processing industry is estimated to cross the

$300 billion mark by
2015. MSMEs
currently contribute
90% of the
industrial units and
40% of the revenue to
the sector. With the
current policy of
SSI reservation, this
sector has been the
predominant growth of
regional enterprises.
MSMEs can further advance into Geographical areas and new product
markets.

b) Biotech and pharma: The Indian pharmaceutical market is the 4TH

largest in the world in terms of volume and 14th largest in terms of value.
India is expected to be one of the top 10 markets by 2020. The collaborative
initiative between the AIMS and Stanford University aims to provide a
forum for the development of new medical technologies to solve some of
India’s healthcare challenges.

18
c) IT & Fintech News: October 2023: The IT and Fintech ecosystem in
India has emerged as a formidable trooper for MSME innovation. Many
small businesses are now building software, mobile apps, cloud-based
services, and digital payment platforms. MSMEs are building secure,
scalable tech solutions for education, e-commerce, healthcare, and financial
inclusion as smartphone penetration rises and governments pursue
digitalization drives (like Digital India). Things like building out UPI-based
services, NBFC tech models, and rural banking tools that connect financial
gaps in underserved regions.
d) Tourism and Hospitality: The tourism and hospitality sector,
especially in states like Rajasthan, Kerala, Goa, and Himachal Pradesh,
provides extensive opportunities for MSMEs. Whether it is managing
homestays, managing eco-resorts, guided tours, transport services, or local
cuisines, MSMEs are contributing toward building rich cultural travel
experiences. Government schemes also promote local entrepreneurship, with
Swadesh Darshan and Incredible India encouraging in-destination local
entrepreneurship and experience creation, and digital platforms enable
MSMEs to serve the global tourism market through booking and marketing
online.
e) Renewable Energy: India’s push toward a greener future has opened
up vast opportunities for MSMEs in the renewable energy sector. Small
enterprises are now manufacturing solar panels, LED lighting, wind
turbines, and setting up EV charging stations across cities and highways.
With the government incentivizing clean energy through subsidies and
production-linked incentives (PLI), MSMEs can play a pivotal role in
reducing carbon emissions and supporting India’s goal of net-zero by 2070.
Rural solar solutions and microgrid systems also present new market
segments for MSMEs to explore.
f) Textiles & Handicrafts: India’s rich tradition in textiles, handicrafts,
and handlooms forms a vital part of rural MSME operations. The sector
employs millions of artisans and weavers across states like Uttar Pradesh,
West Bengal, Odisha, and Gujarat. Under the “One District One Product
(ODOP)” initiative, district-specific crafts and textile forms are being
promoted nationally and internationally. MSMEs involved in these trades are
crucial in preserving indigenous heritage while expanding into export

19
markets through exhibitions, e-commerce platforms, and government-
backed export subsidies.

2.4 CHALLENGES

a) Strategic: IPR, the effective implementation of IPRs in India has

always remained a contentious issue. Weak implementation, ineffective
legislation, and implementation drastically (and illegal) cuts in lead time
thereby a negating the ability of MSMEs to effectively monetize their
innovation.
b) High cost of credit: In the current Indian economic scenario, cheap
funds are difficult to come by, with the RBI reiterating that the cost of funds
will remain high. For a while, to curb inflation, this will continue to remain a
challenge for the sector.
c) Lack of Technology: One of the crucial factors that prompts in the
success or failure of enterprise is technology. The best use of technology no
doubt enables enterprise in reducing cost of production, maintain

20
consistency in quality, improve productivity and finally develop the
competitiveness of the enterprise.
d) Insufficient Infrastructure: The state of infrastructure, including
power, water, roads, etc. is poor and unreliable. While these act as threat to
MSMEs, the biggest impact is felt by their research arm as they don’t have
the firepower to be able to innovate.
e) Lack of skilled labour: Although India has a large pool of human
resources, the industry continues to lack skilled manpower required for
manufacturing, marketing, servicing, etc.
f) Delays in settlement: Large–scale buyers usually have a long
settlement lead time when they deal with MSMEs owing to their limited
bargaining power in the market. This hurt the ability of MSMEs to divert
funds to other capital requirements. And to R&D.

21
 CHAPTER 3
PRESENTATION, ANALYSIS &
FINDINGS

22
3.1 CONTRIBUTION TO INDUSTRIAL PRODUCTION AND
EXPORT

MSME are, at present, operating in wide variety of sectors such as

manufacturing, trade and services and there by constitute a formidable
component of country’s industrial production.
The MSME sector continues to be a formidable component of India’s
industrial ecosystem. It is actively engaged in manufacturing, trade, and
services, and contributes significantly to the country's industrial production
and export performance.
As of 2023–24, MSMEs account for over 45% of total manufacturing output
and more than 90% of industrial units in the country. The sector plays a critical
role in promoting entrepreneurship, innovation, regional balance, and job
creation, especially in rural areas, where nearly 50% of MSMEs are based.
This widespread presence enables inclusive and sustainable industrial
development.

MSME Fixed Asset Investment and Gross Output (2011–2024)

The graph titled “MSME Fixed Asset Investment and Gross Output (2011–
2024)” illustrates a consistent upward trend in both investment and industrial
output by the sector over the years. Fixed investment in MSMEs increased
from ₹11,769.39 billion in 2011–12 to an estimated ₹18,000 billion in 2023–

23
24. Similarly, the gross output rose from ₹18,343.32 billion in 2011–12 to
₹27,000 billion in 2023–24.

This growth trajectory reflects not only increased confidence in the MSME
sector but also enhanced capacity utilization, product quality improvements,
and better access to domestic and global markets. Government initiatives like
RAMP, PMEGP, and PLI schemes, along with enhanced digital integration and
financing reforms, have catalyzed this progress.
Regarding exports, the Press Information Bureau estimates that MSMEs
contributed to approximately 45.73% of India's total exports in 2023–2024.
This demonstrates their market dominance in global markets, particularly in
engineering goods, chemicals, textiles, handicrafts, and pharmaceuticals.

3.2 DISTRIBUTION OF ENTERPRISES CATEGORY

WISE AND ACTIVITY WISE

As per the National Sample Survey (NSS) 73rd round, conducted by

National Sample Survey Office, Ministry of Statistics & Programme
Implementation during the period 2015-16, there were 633.88 lakh
unincorporated non-agriculture MSME in the country engaged in different
economic activities (196.65 lakh in Manufacturing, 0.03 lakh in Non-
captive Electricity Generation and Transmission, 230.35 lakh in Trade and
206.85 lakh in Other Services) excluding those MSME registered under
(a)Sections 2m(i) and 2m(ii) of the Factories Act, 1948, (b)Companies Act,
1956 and (c)construction activities falling under Section F of National
Industrial Classification (NIC) 2008. Statement No. 3.2.1 and Figure 3.2.2
show the distribution of MSMES activity-wise.

24
 Statement No. 3.2.1: Estimated Number of MSMEs (Activity Wise)

Estimated Number of Enterprises (in lakh)

Activity Category Share (%)

Rural Urban Total

(1) (2) (3) (4) (5)

Manufacturing 114.14 82.50 196.65 31

Electricity* 0.03 0.01 0.03 0

Trade 108.71 121.64 230.35 36

Other Services 102.00 104.85 206.85 33

All 324.88 309.00 633.88 100

Figure 3.2.2: Distributions of Estimated MSME (Nature of Activity Wise)

Other Services Manufacturing

33% 31%

Electriccity
0%

Trade
36%

Manufacturing Electricity Trade Other Services

25
The micro sector, with 630.52 lakh estimated enterprises, accounts for
more than 99% of the total estimated number of MSMEs. A small sector
with 3.31 lakh and the Medium sector with 0.05 lakh estimated MSME
accounted for 0.52% and 0.01% of the total estimated MSME,
respectively. Out of 633.88 estimated numbers of MSMEs, 324.88 lakh
MSMEs (51.25%) are in rural areas and 309 lakh MSMEs (48.75%) are in
urban areas. Statement No. 3.2.3 and Figure 3.2.4 show the distribution of
enterprises in rural and urban Areas.

Statement No. 3.2.3: Distribution of Enterprises Category Wise

Sector Micro Small Medium Total Share (%)

(1) (2) (3) (4) (5) (6)

Rural 324.09 0.78 0.01 324.88 51

Urban 306.43 2.53 0.04 309.00 49

All 630.52 3.31 0.05 633.88 100

Figure 3.2.4: Percentage share of rural and urban

MSMEs in the country

Urban
49% Rural
51%

Rural Urban

26
3.3 OWNERSHIP OF ENTERPRISES IN RURAL
AND URBAN AREAS
(Male/ Female ownership category-wise)

Out of 633.88 MSME, there were 608.41 lakh (95.98%) MSME were
proprietary concerns. There was the dominance of males in the ownership of
proprietary MSMEs. Thus, for proprietary MSMEs as a whole, male owned
79.63% of enterprises as compared to 20.37% owned by females. There was
no significant deviation in this pattern in urban and rural areas, although the
dominance of male-owned enterprises was slightly more pronounced in urban
areas compared to rural areas (81.58% as compared to 77.76%).

Statement No. 3.3.1: Percentage Distribution of Enterprises in rural and urban areas
(Male/ Female ownership and category-wise)

Sector Male Female All

Rural 77.76 22.24 100

Urban 81.58 18.42 100

All 79.63 20.37 100

27
Statement No. 3.3.2: Percentage distribution of enterprises owned by Male/Female
entrepreneurs wise

Category Male Female All

Micro 79.56 20.44 100

Small 94.74 5.26 100

Medium 97.33 2.67 100

All 79.63 20.37 100

Figure3.3.3:Percentage distribution of enterprises owned by Male/ Female

entrepreneurs.

120

100
94.74 97.33
80
79.56
60

40

20
20.44
5.26 2.67
0
Micro Small Medium
Male Female

28
3.4 OWNERSHIP OF ENTERPRISES, SOCIAL
CATEGORY WISE

The socially backward groups owned almost 66.27% of MSMEs. The bulk of
that was owned by OBC (49.72%). The representation of SC and ST owners
in the MSME sector was low at 12.45% and 4.10%, respectively. In rural
areas, almost 73.67% of MSMEs were owned by socially backward groups,
of which 51.59% belonged to the OBC. In urban areas, almost 58.68%
belonged to the socially backward groups, of which 47.80% belonged to the
OBC.
Statement No. 3.4.1 Percentage Distribution of enterprises by social group of owner in
rural and urban Areas

Sector SC ST OBC Others Not All

known

Rural 15.37 6.70 51.59 25.62 0.72 100.00

Urban 9.45 1.43 47.80 40.46 0.86 100.00

All 12.45 4.10 49.72 32.95 0.79 100.00

Figure 3.4.2 Percentage Distribution of enterprises in Rural/ Urban areas (Social

Category-wise)

51.59 49.72
47.8
40.46
32.65
25.62

15.37
12.45
9.45
6.7
4.1
0.72 1.43 0.86 0.79

RURAL URBAN ALL

SC ST OBC Others Not Known

29
The analysis of enterprises owned by socially backward groups in each of the
three segments of the MSME sector reveals that the micro sector had 66.42%
of enterprises owned by socially backward groups, whereas the small and
medium sectors had 36.80% and 24.94% of enterprises owned by socially
backward groups, respectively.

Statement No. 3.4.3 Percentage Distribution of Enterprises, Social Category Wise

Sector SC ST OBC Others Not ALL

known
Micro 12.48 4.11 49.83 32.79 0.79 100

Small 5.50 1.65 29.64 62.82 0.39 100

Medium 0.00 1.09 23.85 70.80 4.27 100

All 12.45 4.10 49.72 32.95 0.79 100

Figure 3.4.1 Percentage Distribution of type of Enterprises by Social Group of the

Owner and category

70.8
62.82

49.83 49.72

32.79 32.95
29.64
23.85
12.48 12.45
4.11 5.5 4.27 4.1
0.79 1.65 0.39 0 1.09
MICRO SMALL MEDIUM ALL
Sc ST OBC Others Not known

30
3.5 OWNERSHIP OF ENTERPRISES EMPLOYMENT
WISE
As per the National Sample Survey (NSS) 73rd round conducted during the
period 2015-16, the MSME sector created 11.10 crore jobs (360.41 lakh in
Manufacturing, 0.07 lakh in Non-Captive Electricity Generation and
Transmission, 387.18 lakh in Trade, and 362.82 lakh in Other Services) in rural
and urban areas across the country. Statement No. 3.5.1 and Figure 3.5.2 show
the distribution of MSME activity-wise.

Statement No. 3.7.1: Estimated Employment in the MSME Sector (Activity Wise)

Employment (in lakh)

Broad Activity Category Share (%)

Rural Urban Total

(1) (2) (3) (4) (5)

Manufacturing 186.56 173.86 360.41 32
Electricity* 0.06 0.02 0.07 0
Trade 160.64 226.54 387.18 35
Other Services 150.53 211.69 362.22 33
All 497.78 612.10 1109.89 100

Figure 3.5.2: Distribution of employment in the MSME sector category-wise

other Manufacturing
services 32%
33%

Electricity
0%

Trade
35%
Manufacturing Electricity Trade other services

31
Micro sector with 630.52 lakh estimated enterprises employed 1076.19 lakh
persons, which in turn accounts for around 97% of total employment in the
sector. Small sector with 3.31 lakh and Medium sector with 0.05 lakh
estimated MSME employed 31.95 lakh (2.88%) and 1.75 lakh
(0.16%)persons of total employment in the MSME sector, respectively.
Statement No. 3.5.3 and Figure 3.5.4 show the employment sector-wise
distribution in Rural and Urban Areas.
Statement No. 3.5.3: Distribution of employment by type of Enterprises in Rural and
Urban Areas (Numbers in lakh)

Sector Micro Small Medium Total Share (%)

Rural 489.30 7.88 0.60 497.78 45

Urban 586.88 24.06 1.16 612.10 55

All 1076.19 31.95 1.75 1109.89 100

Figure 3.5.4: Percentage Share of Rural and Urban MSME in the Country (Number in
lakh)

Urban Rural
55% 45%

Rural Urban

32
Of 1109.89 lakh employees in the MSME sector, 844.68 lakh (76%) are
male employees, and the remaining 264.92 lakh (24%) are female
employees. Statement No. 3.5.5 and Figure 3.5.6 show the sectoral
distribution of workers in the male and female categories.

Statement No. 3.5.5: Distribution of workers by gender in rural & urban areas

(Numbers in lakh)
Sector Female Male Total Share (%)

Rural 137.50 360.15 497.78 45

Urban 127.42 484.54 612.10 55

Total 264.92 844.68 1109.89 100

Share (%) 24 76 100

Figure 3.5.6: Distribution of workers in Male and Female Categories

264.92, 24%

844.68,76%

Male Female

33
3.6 State-Wise Distribution of Estimated MSME
The state of Uttar Pradesh had the largest number of estimated MSMEs, with
a share of 14.20% of MSMEs in the country. The top 10 States accounted for
a share of 74.05% of the total estimated number of MSMEs in the country.
Statement No. 3.6.1 and Figure 3.6.2 show the distribution of estimated
enterprises in the top ten States.
Statement No. 3.6.1: State-wise Distribution of enterprises

Estimate the Number of MSMEs

Sl.
State/UT
No. Number (in lakh) Share (in %)

1 Uttar Pradesh 89.99 14

2 West Bengal 88.67 14
3 Tamil Nadu 49.48 8
4 Maharashtra 47.78 8
5 Karnataka 38.34 6
6 Bihar 34.46 5
7 Andhra Pradesh 33.87 5
8 Gujarat 33.16 5
9 Rajasthan 26.87 4
10 Madhya Pradesh 26.74 4
11 Total of the above ten 469.36 74
States
12 Other States/UTs 164.52 26
13 All 633.88 100

Figure 3.6.2: Distribution of MSMEs in the Top Ten States

180 164.52
Number of Estima tes MS MEs(in lakhs)
160
140
120
100 89.99 88.67
80
60 49.48 47.78
38.34 34.46 33.87 33.16
40 26.87 26.74
20
0

34
3.7 AREAS TO BE FOCUSED ON TO STRENGTHEN
THE MSME SECTOR IN INDIA
There are a few areas where state and central governments are required to focus
to strengthen the MSME sector, so that it can continue its contribution to the
nation’s growth.

Technology and environment: The economic competitiveness depends on

how efficiently all the resources in the process of production are utilized and
how efficiently these are marketed, thus, the entire chain of production has to
be efficient. This means that the course of production has to be cost-efficient
and should meet the quality needs of the consumers. This improvement can
come through the use of latest technology. However, India has a vast pool of
technical talent with a well developed intellectual infrastructure, the country
still lags behind in the matter of developing and adapting new technologies in
the MSME sector. The MSME sector presently needs an effective information
system to support and deliver information to different users. Such information
systems will be used to provide an effective interface between users and
computer technology and will also provide information for managers on the
day- today operations of the enterprises.

Access to markets: To face the competition from large enterprises within and
outside, MSMEs are required to respond promptly to the evolving marketing
needs and innovations. There is an immediate need to provide better market
access facilities in order to sustain and further increase its contribution towards
output, employment generation, and exports. A published research has
highlighted that a massive opportunity exists for SMBs to reach their desired
financial goals by optimizing their network presence and capabilities. It
additionally pointed out that since the majority of India's MSMEs, especially
the small businesses, generate a large amount of their revenue from the local
market, they still rely on traditional media like telephone directories and
newspapers to reach their customer base.

35
Infrastructural bottlenecks: One of the major concerns is the lack of
Infrastructural facilities, which can cause serious damages to an enterprise's
value chain process, such as production, consumption, and distribution of the
products, besides, lack of finance, technological obsolescence and inadequate
marketing facilities etc. that are being already faced by MSMEs. Common
infrastructure projects for MSMEs could be solution for this, MSMEs coming
together and sharing the costs of infrastructure, which are otherwise
unaffordable for individual or single MSMEs, could benefit from economies
of scale, synergy and collective bargaining by collaborating with each other
particularly in case of common infrastructure, common facilities, raw material
procurement, marketing &
transportation of finished
goods, testing laboratory,
common tooling/
machining, Research &
Development etc.
Mentoring and Advocacy:
Entrepreneurs who are
coming forward to establish
the business organizations
often have a product or
service idea, a passion for
hard work, but limited
money, knowledge about markets, Government or bank procedures, cash
flows, or how to manage manpower. This is where mentoring a hand hand-
holding support becomes crucial. At times, this comes from different sources
such as a friend, a relative, an NGO or a parent unit. This is interrupted and
unable to meet the vast requirements of the country. This is required to be
institutionalized through extension/outreach efforts Governments. Trained
human resources are made available for this task, right down to the district
level, to act as a guide. These resource persons guide in setting up a unit,
making it commercially viable, interacting with financial institutions and
understanding markets, as well as the impact of globalization with
advancements in it. The Small Industry Development Organization is now
playing a direct promotional role of hand-holding, advocacy, and facilitation.
This encompasses the legislative support put in place, fiscal incentives, and
protection from unequal competition.

36
Access to Credit: Credit is the lifeline of business. As risk perception about
small businesses is high, investors are unwilling to invest in sole
proprietorships, partnerships, or unlisted companies. Institutional credit,
when available, requires collateral, which in turn makes the owner of the unit
even more exposed to foreclosure. Credit guarantee funds, which assist
lending institutions in mutual guarantee or advancing loans involving
common guarantees from a group of people, have not emerged in a
significant manner. Unit finances come under severe stress whenever an
occasional event, such as a large order, rejection of consignment, or
inordinate delay in payment, occurs. Under these circumstances, not the
International Journal of Pure and Applied Mathematics Special Issue 1736
surprisingly, small
enterprises prefer to first
tap their resources or loans
from friends and relatives,
and there’s look for
external finance. In this
connection, Micro Units
Development and
Refinance Agency Bank
(MUDRA Bank) is a new
institution set up by the
Central Government for
the development of micro units and refinance of MFIs to encourage
entrepreneurship in the country and to provide funding to the non-corporate
small business sector. MUDRA Bank will need two types of products, like
refinance for the micro units having a loan requirement from Rs 50 thousand
to 10 lakhs and support of Micro Finance Institutions (MFI) for on-land.
MUDRA will refinance micro businesses under the scheme of Pradhan
Mantri MUDRA Yojana.
Globalization: The globalization of trade & commerce has changed the
business environment through the WTO agreement. It has therefore become
necessary to make SMEs aware of these changes and prepare them for the
future. In India, several steps have been taken in this view. Apart from setting
up a WTO cell in the nodal ministry, 28 awareness workshops were conducted
across the country. Workshops have also been held on intellectual property

37
rights and bar coding. Monitoring of imports in specific sectors where SMEs
have a significant presence and initiation of anti-dumping action where
dumping was noticed are the other steps taken in this respect.

3.8 STRATEGY INTERVENTION FOR

REVITALIZATION AND GROWTH OF MSMEs
Significant changes in the economic environment are being heralded by the
WTO. The removal of QRs has led to increased competition with imports.
Indian industries, particularly MSMEs, are facing competition from Asian
countries like China or Taiwan in imports and Sri Lanka, Bangladesh, or Nepal
in exports. The Indian Government is standing on a policy that ‘promotion and
not protection is the solution to the issues of survival and growth’.
Hence, while the reservation of goods for exclusive production continues, the
focus must now be on strengthening competencies. This implies a holistic
look at the concerns of the industry. As part of this, the following strategic
interventions have been initiated:
 Easing credit accessibility

 Introduction of options for limited partnership and factoring

 Subsidy in the finance cost for upgrading technology

 Industry-specific technology upgrade programmes

 Support for developing and accessing overseas markets for export

 Expanding the reach of infrastructure programmes

 Encouraging self-declarations instead of inspections for various

regulations

38
Interventions should remove the hurdles to growth in the future. They must
encourage a flawless movement from small to medium to large. The Indian
Government, therefore, is working on a new vision for the SSI sector through
a flexible approach and a motivated team. The encouragement role of the
Government now involves new dimensions such as arguing cases before the
World Trade Body or dispute redressal, communicating the needs of small
enterprises before decision makers and other agencies.

39
3.9 STRATEGIES ADOPTED BY THE GOVERNMENT
OF INDIA FOR SUSTAINABLE DEVELOPMENT AND
ENTREPRENEURSHIP
After the era of independence, consistent and remarkable efforts were made by the Indian
government for sustainable development. To do that, policies and strategies were formulated,
and numerous acts have been enacted to develop entrepreneurship and employment. Moreover,
various skill development programmes and plenty of training and development schemes are
also offered for the benefit of an entrepreneur to enhance their entrepreneurial skill and
knowledge. In short, the following steps have been taken or efforts have been made for the
entrepreneurship development in India.

1. Industrial Policies
The government of India has been continuously revising and declaring
industrial policies. From the year of 1948 to 1991 five times such as 1956,
1980 and 1986 respectively the industrial policy has been revised.
According to that, the number of small entrepreneurs also significantly
increased. To do that, the government of India has also established many
institutions like Small Industries Development Organisation (SIDO),
National Small Industries Corporation (NSIC), Entrepreneurship
Development Institute of India (EDII), and so on for the development of
entrepreneurship in India.

2. Ease of Licensing Procedure

Limited industries are only required to obtain licenses from the government;
others have been exempted from this procedure. The process of obtaining the
license has been substantially simplified and reduced.
3. Liberal Economic Policies
The central government has made its economic policies, like export-import
policy, taxation policy, fiscal policy, and monetary policy, etc. excessively
liberal, which has resulted in entrepreneurship development in the country.

4. Development of Industrial Estates

The Government has developed various industrial areas/estates in various
states, wherein private entrepreneurs have established their industries. The
government has attracted entrepreneurs to establish new industries in these

40
industrial areas by providing facilities of land, transportation, banks,
warehouses, water, and electricity, and so on.

5. Development of Technical and Vocational Education

The central government, as well as the state government, have also
established technical and vocational education centres where vocational
education has been provided. The technical and vocational education at the
level of schools, colleges, and universities has been introduced, where
education is being provided relating to entrepreneurial development,
entrepreneurial feelings, and facilities and procedures for the establishment
of small industries. In the present education policy, the government of India
aims at vocational and technical education by dispensing with the necessity
of a degree, and for that, open universities have also been established .

6. Establishment of Science and Technology Parks

Science and technology parks
have also been established in
India for the development of
entrepreneurs. The Industrial
development bank of India is
making efforts for these
parks. Bank has established
an entrepreneurial park and
industrial parks.

7. Organization of Seminars
and Workshops
Seminars and workshops are
organized in India and other countries for entrepreneurial development.
Indian Industrial Entrepreneurial Development Institute and other popular
institutions.

8. Declaration of Product-Wise Polices

Government has declared product-wise policies for developing new and
existing entrepreneurs. These include textile policy, electronic policy, drug
respect of innovations in the field of industries, use of new commodities, use

41
of new methods for production of new commodities, the search for new
markets, and their development.

9. Establishment of Entrepreneur Assistance Unit

The Government of India had established an Entrepreneur Unit in the
Industrial Development Department in the year 1966.

10. Development of Women Entrepreneurs

In the modern age, entrepreneurial tendencies are developing in women also,
due to coeducation and women's education. Women are also getting attracted
to technical and management education. Various types of organizations,
therefore, are providing cooperation to women entrepreneurs in India for
entrepreneurial activities.

11. Establishment of Financial Institutions

The Government of India has established various specific financial
institutions. These institutions prepare projects for the new entrepreneurs and
also help them in implementing the projects. These institutions provide fixed
capital, seed capital and working capital. In addition, several companies in
the private sector are presently establishing venture capital funds, also to
encourage new entrepreneurs to establish industries, by providing capital to
new entrepreneurs.

12. Export Promotion Programmes

The central government has taken various measures for export promotion, as
the organization of international rebates in taxes to export-oriented units, the
organization of international seminars and workshops, and encouragement to
entrepreneurs to enter into the international market, making export contracts
with several countries. The Small Industries Development Institute (SIDO)
has been established in India to provide advisory services to entrepreneurs in
technical, managerial, and economic fields.

42
13. Start-up India

The Government of India's flagship initiative, Start-up India, was

introduced in 2016 with the goal of promoting a strong ecosystem of
entrepreneurship, innovation, and economic independence. The program's
goal is to establish a supportive atmosphere that will enable Indian
startups—many of which are classified as Micro, Small, and Medium
Enterprises (MSMEs), to develop, expand, and make significant
contributions to the national economy.

Over 90,000 acknowledged startups have benefited from the initiative as

of 2023. These businesses, which are mostly led by or backed by MSME
infrastructure, are spread across industries like technology, healthcare,
manufacturing, and agritech.

Launching India is essential to promoting long-term economic expansion

and creating a significant number of job opportunities. Young Indians with
creative ideas are encouraged to take risks as entrepreneurs, supported by
a policy and support ecosystem that reduces barriers and nurtures business
viability.
However, recognizing that many start-ups struggle to realize their full
potential due to limited guidance and capital access, the government has
introduced a range of support mechanisms under the Start-up India
program, specifically tailored to empower MSMEs.

14. Make in INDIA

The Make in India initiative, launched in September 2014 by the

Honourable Prime Minister, was envisioned as a transformative national
movement to position India as a global manufacturing and design hub. It
arose as a calculated reaction to the economic difficulties of the early
2010s, when India's growth rate had slowed, investor confidence had
eroded, and the nation was classified as one of the "Fragile Five"
economies. By fostering an atmosphere that encouraged investment,
innovation, and entrepreneurship, the program sought to revitalize
industrial growth. MSMEs are the foundation of India's industrial base,

43
and Make in India has been essential to their growth in vital industries like
electronics, textiles, defense, renewable energy, and pharmaceuticals. The
initiative has led to a significant increase in foreign direct investment in
MSME-linked sectors and has encouraged small enterprises to upgrade
technology and improve production standards. The development of
industrial corridors and smart manufacturing zones has enhanced
infrastructure access
for MSMEs, while
greater emphasis on
local sourcing and
vendor development
has enabled their
integration into the
supply chains of large
corporations and
multinational
companies. Moreover,
the introduction of the Production Linked Incentive (PLI) Scheme under
Make in India has offered performance-based financial support to MSMEs
operating in high-growth areas like electronics, auto components, and
APIs. By facilitating technological advancement, promoting exports, and
boosting employment, Make in India has strengthened the role of MSMEs
as engines of economic growth and drivers of a self-reliant and globally
competitive India.

15. Quick Approval of Project Reports

The project reports submitted by the entrepreneurs to district industries centre
established by the government are quickly approved, as a result, the
entrepreneur is able to quickly obtain loan from the bank or financial
institution.

44
 CHAPTER 4
CONCLUSIONS

45
The Indian economy provides a revealing contrast between the manner
individuals react under a government-controlled environment and how they
respond to a market-based environment. The evidence presented here suggests
that recent market reforms encouraging individual enterprise have led to
higher economic growth in the country and can yield a wide range of economic
benefits. In India these benefits include increased economic growth, reduced
inflation, a smaller fiscal deficit, and higher inflows of the foreign capital
needed for investment.
We further conclude that India can generate additional economic growth by
fostering entrepreneurial activities within its borders, particularly within its
burgeoning middle class. Not only has entrepreneurship been found to yield
significant economic benefits in a wide variety of nations, but India
specifically has reached a point in its development where it can achieve similar
results through entrepreneurial efforts. Among other things, India is poised to
generate new business startups in the high technology area that can help it
become a major competitor in the world economy. For example, it has a strong
education base suited to entrepreneurial activities, increased inflows of foreign
capital aimed at its growing information technology services sector, and a host
of successful new business start-ups. To pursue further the entrepreneurial
approach to economic growth, India must now provide opportunities for
(1) education directed specifically at developing entrepreneurial skills,

(2) financing of entrepreneurial efforts, and

(3) networking among potential entrepreneurs and their experienced
counterparts.
Despite the MSME’s Strategic importance in overall industrialization strategy
and employment generation, Indian landscape presents the small sector due to
its large scale dependency on credit. The performance of developed economies
and confidence index of the manufacturing sector and many other factors
determine the fate of small sector in the country ,as MSME’s form an integral
part of almost every value chain.
The Ministry of MSME undertakes the crucial role in entrepreneurship
development for the sustainable development in India. It makes a considerable
and significant contribution in providing large financial and supporting
assistance to the small and medium-sized industries. It widened their domain

46
across all the sectors of the Indian industries to develop employment
opportunities and entrepreneurship development of the county by fostering
entrepreneurship opportunities. Hence, the study presented the significant
contribution of the MSME to empower the sustainable development in India
The Indian economy provides a revealing contrast between the manner
individuals react under a government-controlled environment and how they
respond to a market-based environment. The evidence presented here suggests
that recent market reforms encouraging individual enterprise have led to higher
economic growth in the country and can yield a wide range of economic
benefits. In India, these benefits include increased economic growth, reduced
inflation, a smaller fiscal deficit, and higher inflows of foreign capital needed
for investment.
We further conclude that India can generate additional economic growth by
fostering entrepreneurial activities within its borders, particularly within its
burgeoning middle class. Not only has entrepreneurship been found to yield
significant economic benefits in a wide variety of nations, but India
specifically has reached a point in its development where it can achieve similar
results through entrepreneurial efforts. Among other things, India is poised to
generate new business startups in the high technology area that can help it
become a major competitor in the world economy. For example, it has a strong
education base suited to entrepreneurial activities, increased inflows of foreign
capital aimed at its growing information technology services sector, and a host
of successful new business start-ups. To pursue further the entrepreneurial
approach to economic growth, India must now provide opportunities for
(1) education directed specifically at developing entrepreneurial skills,

(2) financing of entrepreneurial efforts, and

(3) networking among potential entrepreneurs and their experienced
counterparts.
Despite the MSME’s Strategic importance in overall industrialization strategy
and employment generation, the Indian landscape presents the small sector due
to its large-scale dependency on credit. The performance of developed
economies and confidence index of the manufacturing sector and many other
factors, determine the fate of the small sector in the country,as MSME’s form
an integral part of almost every value chain.

47
The Ministry of MSME undertakes the crucial role in entrepreneurship
development for the sustainable development in India. It makes a considerable
and significant contribution in providing large financial and supporting
assistance to the small and medium-sized industries. It widened their domain
across all the sectors of the Indian industries to develop employment
opportunities and entrepreneurship development of the country by fostering
entrepreneurship opportunities. Hence, the study presented the significant
contribution of the MSME to empower the sustainable development in India..

48
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50