Revving India’s Economic Engine: Unleashing MSMEs’ Potential Amidst Challenges and Charting a Path to Prosperity

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Acharya Balkrishna, Nidhi Sharma, and Vedpriya Arya (Department of Patanjali Herbal Research, Patanjali Research Institute, Haridwar, Uttarakhand)

Micro, Small, and Medium Enterprises (MSMEs) play a pivotal role in India, efficiently utilizing limited resources. They excel in resource optimization, operational flexibility, innovation, and low investment needs. Globally, the MSME sector contributes significantly to economic growth, comprising over 99% of enterprises in the European Union and around 80% in the United States, representing 44% of economic activity. In India, the MSME sector shows immense promise, with approximately 63.5 million units significantly contributing to manufacturing GDP, services, and overall output. It stands as the second-largest employment provider, generating 11.10 crore jobs, particularly in rural areas. Nurturing this sector is critical for achieving inclusive growth and self-sufficiency goals set by the Atmanirbhar Bharat initiative. The government supports MSMEs through market assistance, export promotion, and various programs like MSE-CDP, PMEGP, SFURTI, and IT ecosystems. Initiatives like NIMZs, Make in India, Start-Up India, Stand Up India, and Digital India further prioritize MSME growth. However, non-uniform growth rates and labor migration have posed challenges. To unlock the sector’s full potential, adopting advanced technology is recommended. This paper comprehensively examines India’s MSME sector, analyzing strengths, challenges, and untapped prospects, aiming to identify obstacles and formulate effective strategies and policies to foster an enabling environment for success.