MSME holds the key for economic growth and employment generation in India. Explain the potential of MSME in growth and social development of country in the light of Make in India programme.

 MSME holds the key for economic growth and employment generation in India. Explain the potential of MSME in growth and social development of country in the light of Make in India programme.


  • Mention status of MSME and employment in India.
  • Emphasize that MSMEs are working under-potential and needs revival.
  • Discuss the role of make in India in MSME
  • Write few challenges, way forward and conclude accordingly.
Model Answer :
The Micro, Small, and Medium Enterprises (MSMEs) Sector through more than 6,000 products contributes about 8% to GDP, 45% to the total manufacturing output and 40% to the exports from the country. MSMEs are complementary to large industries as ancillary units and this sector contributes enormously to the socio-economic development of the country. As India gears up to retrace the high growth path, the MSMEs assume a pivotal role in driving the growth engine and generating employment opportunities.
Significance for growth and social development of the country:
  • MSME sector currently consists of 36 million units, and provides employment to over 8 crore persons.
  • This sector has the potential to increase its share in manufacturing GDP to 15% by the year 2020, with a potential to contribute over 50% to the employment.
  • The sector provides large opportunities for both self-employment and wage-employment outside the agricultural sector at comparatively lower capital cost than large industries.
  • MSMEs help in industrialization of rural & backward areas, thereby, reducing regional imbalances, assuring more equitable distribution of national income and wealth.
  • MSMEs contribute in building an inclusive and sustainable society through creation of non-farm livelihood at low cost, balanced regional development, gender and social balance, environmentally sustainable development, etc.
Make in India and MSMEs:
The Make in India programme emphasizes on increasing the share of manufacturing in GDP from present 14-15% to 25 % by 2022, by getting Indian companies as well as global firms to invest and partner in the manufacturing. These firms can take advantage of the inherent depth of the MSME Sector in terms of range of products and services, marketing networks in the defence ancilliaries, auto industry, electronics industry, chemicals, leather, textiles, agro and food processing, pharmaceuticals, transport and tourism industries, etc.
Some initiatives which are part of the Make in India programme can help transform MSME sector, including the cluster development programme (MSE-CDP), National Manufacturing Competitiveness Programme (NMCP), Skill Development through MSME Development Institutes, Khadi promotion etc.
However, certain challenges confront the MSMEs, including lack of adequate credit and capital, poor and inadequate infrastructural facilities, inadequate access and marketing linkagess and technology etc. The Indian MSME sector is poised for rapid growth and integration with major global value chains. Timely policy intervention and due support to this sector to overcome challenges can render the Indian MSMEs globally competitive, and enable them to drive growth and social development of our country.

Subjects : Economy

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