The share of products related to the MSME sector in the overall exports of the country was 45.56% in 2023-24, up till September 2023.
Key Highlights
- The share of MSME-related products increased in the overall exports in the country.
- More than 3 crore MSMEs have been registered on the UDYAM portal since its inception.
- The credit gap in the MSME sector is estimated to be in the range of INR 20 to 25 trillion.
With around 6.3 crore MSMEs in the country engaged in various industries of the economy, it is pertinent to understand how the enterprises classified as MSMEs are performing.
Given the sector’s employment generation capacity, its performance and well-being is crucial to the growth plans of the country.
It is enterprises in the MSME sector that took the hit when COVID-19-induced lockdowns shut many businesses down.
Have they recovered? How much is the sector contributing to the economy? Let’s see.
MSME Sector’s Contribution to the GDP and Exports
According to the recent data released by the Ministry of MSME, the share of MSME-related products in the overall exports of India was 45.56% till September 2023.
While that is an increase from FY 2022-23, within which the share of MSME-related products was 43.59%, it is down from the sector’s performance in FY 2019-20 and FY 2020-21, when MSME-related products constituted 49.77% and 49.35% of the total export from the country respectively.
| Year | Share of MSME-related products in All India Exports |
| 2019-20 | 49.77% |
| 2020-21 | 49.35% |
| 2021-22 | 45.03% |
| 2022-23 | 43.59% |
| 2023-24 | 45.56% |
The Gross Value Added (GVA) by the Micro, Small, and Medium-sized Enterprises (MSMEs) to the country’s total output (GDP) was 29.2% in FY 2021-22. The government did not provide the data for FY 2022-23.
Formalisation of MSMEs and plugging the credit gap
One of the problems with reckoning the performance of MSMEs is the lack of data due to many enterprises functioning in the informal sector.
However, FY 2023-24 oversaw a positive development in that arena.
As of December 2023, the UDYAM portal has recorded around 3.16 crore UDYAM Registrations since it was launched in 2020.
The total registrations included registrations through the UDYAM Assist Platform that was launched by the government in January 2023 for the formalisation of the Micro Enterprises.
This points towards a growing formalisation of the MSME sector, which could help them access credit easily from financial institutions.
According to the press release by the Ministry of MSME, the RBI had estimated the credit gap in the MSME sector to be in the range of INR 20 to 25 trillion.
To plug the credit gap for these enterprises, the RBI has taken several measures, which include a platform for Invoice Discounting, and a regulatory sandbox to spur innovation.
