The number of total MSMEs across India has reached 6.33 crore in 2017-18. Within a year, the number of MSMEs witnessed a sharp 25% increase.
Several key initiatives introduced by Prime Minister Narendra Modi, like an online registration process and easy grant of loans, have led to a massive increase in the number of Micro, Small & Medium Enterprises (MSME) in the country, according to the 2017-18 report of the Ministry of Micro, Small & Medium Enterprises.
According to the ministry’s report, the number of total MSMEs across the country, which was 4.53 crore in 2016-17, has reached 6.33 crore in 2017-18. Within a year, the number of MSMEs witnessed a sharp 25% increase.
Under the reformed provisions, entrepreneurs don’t need to go through the strict inspection process which was earlier mandatory for getting MSME registration certificate. Under the new policy, the online registration process requires only a few basic information such as GST numbers, office address proof and information regarding the business model for being eligible to get MSME status.
Rajiv Chawla, chairman of the Integrated Association of Micro Small & Medium Enterprises of India, told The Sunday Guardian: “The key initiatives, including the recently launched 59 minute loans portal to enable easy access to credit for MSMEs, mandatory 25% procurement from MSMEs by Central Public Sector Enterprises and the ordinance for simplifying procedures for minor offences under the Companies Act, have led to the rise in the number of new MSME units in the country.”
The loan-in-59-minutes portal provides an interface for easy loans to non-corporate and non-farm small industries. It’s a flagship scheme launched by the Prime Minister this month to “fund micro enterprises” by bringing them under the formal financial system and extending affordable credit to them. Under the 59-minute-loan portal scheme, loans up to Rs 1 crore can be granted to individuals having an MSME unit.
“The MSME sector has emerged as a highly vibrant and dynamic sector in the country and this is a good sign for the country’s economic growth. MSMEs are not only playing an important role in providing employment opportunities at comparatively lower capital cost than large industries, they are also helping in promoting industrialisation in the rural and backward areas of the country,” Chawla added.
States which have witnessed the highest increase in the number of new MSME units include Uttar Pradesh with a share of 14.20% of the total MSME units in the country. West Bengal comes close to UP with a share of 14%. With 89.99 lakh MSMEs, UP is in the first position and with 88.67 lakh MSME units, West Bengal was second in the list, as per the annual report 2017-18 of the MSME ministry. Besides UP and West Bengal, in terms of state-wise ranking, with 49.48 lakh MSMEs, Tamil Nadu is in the third position, and with 47.78 lakh and 38.34 lakh MSMEs, Maharashtra and Karnataka are in the fourth and fifth positions respectively, according to the same report.
Bihar has shown a record jump in the number of registration of new MSMEs and with 34.46 lakh MSME units, the state is in the sixth position. However, experts have raised concerns that high MSME registrations from Bihar might be due to fake registrations, as prior to 2016, Bihar had never been in the list of top 10 states.
The MSME sector is the largest job provider in the country, contributing about 8% to GDP and has a share of 45% in the country’s manufacturing output growth.