MsME: Entrepreneurship of the New Era (Download PDF)

Doorsteptutor material for CLAT is prepared by world's top subject experts: fully solved questions with step-by-step explanation- practice your way to success.

  • Employs over 100 million people.
  • A $ 5 trillion economy by 2024 – 25.
  • Accounts for 45 % of manufacturing output as well as more than 40 per cent of the country՚s exports.
  • Contributes 29 per cent of the country՚s GDP.
  • The estimated number of workers in unincorporated non-agriculture MSMEs in India was 11.10 crore as per the 73rd Round of the National Sample Survey, conducted during 2015 – 16.
  • Prime Minister՚s Employment Generation Programme the estimated employment generated (number of persons) in micro-enterprise:
    • 3.58 lakh during 2014 – 15
    • 3.23 lakh during 2015 - 16
    • 4.08 lakh during 2016 - 17
    • 3.87 lakh during 2017 - 18
    • 5.87 lakh during 2018 - 19
  • MSMEs have been the largest job creators over the last 4 years:
    • Hospitality and tourism
    • Textiles and apparel
    • Metal products
    • Machine parts and logistics

Economic Reforms Impacting MsMEs

  • Aadhaar, the world՚s largest unique digital identity programme.
  • India ranks 77 in 2019 in the World Bank՚s Ease of Doing Business rankings.
  • Increasing smartphone penetration and connectivity — currently more than 530 million smartphone users — is expected to increase to more than 1 billion users by 2024.
  • At present more than 500 million internet users are expected rise to 1.2 billion internet users by 2024.
  • Bharat Interface for Money (BHIM) application are giving a massive boost to digital money transactions.
  • A portal was launched to approve loans for MSMEs in just 59 minutes for an amount limit of ₹ 1 crore to ensure that physical visits to banks were no longer necessary.
  • India Stack-A new digital ecosystem:
    • A set of Application Programming
    • Allows governments, businesses, start-ups and developers to utilise a unique digital infrastructure
    • To solve India՚s hard problems towards presence-less, paperless and cashless service delivery
  • e-Marketplace (GeM) is revolutionizing procurement processes.
  • Artificial Intelligence is further expected to play a key role in accelerating business performance for MSMEs, especially in the areas of efficiency, innovation and growth.

Percentage of MsME Enterprises in India

Percentage of MsME Enterprises in India
StatesPercentage (%)
Uttar Pradesh14.2

Trade Receivable Electronic Discounting System (TReDs)

  • To address the working capital requirements of MSMEs.
  • Also to address the working capital requirements of Samadhaan Portal for handling delayed payment issues.

MsME Cluster Development Programme

  • More than 24 Common Facility Centres and 25 infrastructure Development Projects were approved.
  • 5,46, 127 credit facilities were approved amounting to a guarantee of ₹ 33,381 crore.
  • Under the Credit Guarantee Fund Trust for Micro and Small Enterprises.

Technology Centre Systems Programme

  • Setting up new 15 tool rooms and technology development centres in the country.
  • Upgrading the existing 18 TCs in the country.
  • The govt. also aims to make India one of the top five global producers with an annual export target of $ 5 by 2025 with respect to aerospace and Defence manufacturing.

Key Budget Announcements and Allocations

  • The government set aside an all-time high sum of ₹ 7,572.20 crore.
  • The Ministry of Micro, Small and Medium Enterprises.

Khadi Vikas Yojana and Gramodyog Vikas Yojana

  • For developing a sustainable model of Khadi-based enterprises in villages.
  • ₹ 391 crore for the MSE-Cluster Development Programme, an increase of 71 % from the previous year.


  • The Scheme of Fund for Regeneration of Traditional Industries.
  • A higher allocation of ₹ 465 crore compared to ₹ 125 crore in the previous year.
  • For equipping traditional industries in becoming more productive, profitable and large-scale employment generators for artisans.
  • The allocation under the Credit-Linked Capital Subsidy and Technology Upgradation Scheme has been increased to ₹ 805 crore.
  • To promote entrepreneurship among Scheduled Castes and Scheduled Tribes, the National Scheduled Caste/Scheduled Tribe Hub has been allocated ₹ 150 crore.

Announcements W. R. T MsMEs in the Union Budget 2020 - 21

  • The turnover threshold for a business in the MSME sector.
  • Audited by an accountant has been raised from ₹ 1 crore to ₹ 5 crore.
  • To reduce the burden of compliance, particularly on smaller traders, retailers and shopkeepers.
  • The corporate tax rate has been cut to 15 % for new businesses in the manufacturing space.
  • The rate for existing companies has been lowered to 22 % .
  • To enable the expansion of businesses, including through fresh investments.
  • The Dividend Distribution Tax has been removed to reduce the tax burden on investors.
  • Amendments have been proposed to the Factor Regulation Act, 2011 for enabling Non-Banking Finance Companies to extend invoice financing to MSMEs through TReDS.
  • It has been proposed that a scheme for providing subordinate debt in the form of quasi-equity will be introduced.
  • Other key budgetary announcements:
    • An app-based invoice financing loans product.
    • Creation of a unified procurement system through GeM.
    • Indirect tax reforms for improving compliance.
    • Automation of GST refunds and Aadhaar-based verification of taxpayers.

- Published/Last Modified on: September 10, 2020

Science/Technology, Economy, Kurukshetra

Developed by: