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MSMEs play an important role in the economic growth and employment generation of any country. The MSME sector is considered the backbone of the Indian economy.

The number of MSMEs in India has grown rapidly over the past few years. In India, there around 63 million micro, small and medium scale enterprises, as per the government. These industries contribute to over 45% of the country’s manufacturing output, 40% of exports, and 30% of GDP. The government aims to increase the contribution of the sector to GDP to 50% in the next five years.

These industries provide employment to more than 110 million people in the country. The micro-enterprises comparatively provide more employment opportunities than the small and medium scale enterprises.

Like every other sector, the MSME sector was hit badly by the Covid-19 pandemic. The impact of the pandemic on the MSME sector is huge due to the unorganized nature of the sector.

The Government of India has taken a lot of initiatives to help the sector recover from the pandemic. The government has revised the definition of MSMEs in the country by increasing the investment and annual turnover limits. This helps them avail more benefits from the government schemes directed at the MSME sector.

Under the Atmanirbhar Bharat scheme, the government has announced several measures for the MSMEs, including Rs. 20,000 Cr. Subordinate Debt for Stressed MSMEs, Rs. 50,000 Cr. Equity Infusion for MSMEs through Fund of Funds, Disallowing of Global Tenders Up-to Rs. 200 Cr. Projects, Rs. 3 Lakh Crore Collateral-free Automatic Loans, etc.