Context:
2024 International MSME Day commemorated
Micro, Small and Medium Enterprises (MSMEs):
- International MSME Day – June 27
- Significance –
- Account for 90% of global businesses
- Contributes 60 to 70% of employment
- Contributes 50% of GDP.
MSMEs in India:
- Regulated under – Micro, Small & Medium Enterprises Development (MSMED) Act, 2006.
- Nodal Ministry – Ministry of MSME.
- Categorisation – Was based on the amount invested in plant and machinery/equipment.
- With revised regulations effective from July 2020, annual turnover has also been added as a criterion.
- Significance –
- Employment – 2nd largest employment generating sector after agriculture.
- Contribution to GDP – MSMEs contribute around 6.11% of the manufacturing GDP and 24.63% of the GDP from service activities.
- Exports – Contributes around 45% of the overall exports from India.
- Inclusive growth – MSMEs promote inclusive growth by providing employment opportunities in rural areas
Initiatives to support MSMEs in India:
- Pradhan Mantri Mudra Yojana – A scheme launched in 2015 for providing loans up to 10 lakh to the non-corporate, non-farm small/micro enterprises.
- Priority Sector Lending for MSMES
- Raising & Accelerating MSME Performance (RAMP)
- Aatmanirbhar Skilled Employee Employer Mapping (ASEEM) Portal
Source: United Nations
Previous Year Question
Consider the following statements with reference to India:
1. According to the ‘Micro, Small and Medium Enterprises Development (MSMED) Act, 2006, the ‘medium enterprises’ are those with investments in plant and machinery between Rs. 15 crores and Rs. 25 crores.
2. All bank loans to the Micro, Small and Medium Enterprises qualify under the priority sector.
Which of the statements given above is/are correct?
[UPSC Civil Services Exam – 2023 Prelims]
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2
Answer: (b)
Explanation:
Medium Enterprise: An enterprise where the investment in plant and machinery or equipment does not exceed Rs. 50 crores, and turnover does not exceed Rs. 250 crores. Hence, Statement 1 is not correct.
