Sameer Mahandru talks about MSMEs as Catalysts for Grassroots Innovation and Job Creation

MSMEs in India are classified according to their investment in plant and machinery or equipment and their annual turnover. Microenterprises are those with an investment of less than Rs. 1 crore and a turnover of less than 5 crores. Small enterprises have an investment of less than Rs. 10 crores and a turnover of up to Rs. 50 crores. Medium enterprises are defined by an investment of less than Rs. 20 crores and a turnover of up to Rs. 100 crores. This classification enables the government to provide targeted support and incentives to businesses of varying sizes, helping them grow and contribute to the economy.

Recognising their importance, the Government of India enacted the Micro, Small & Medium Enterprises Development (MSMED) Act, 2006, to provide a legal framework and targeted support for their growth.

As of Dec 2024, 5.70 crore MSMEs have generated employment for 24.14 crore people who are registered on the government portals. The MSME sector contributes around 6.11% of the manufacturing GDP and 24.63% of the GDP from service activities.

Sameer Mahandru feels that the MSMEs are the backbone of the Indian economy. They may be small in size, but their impact is mighty.

Thanks to the ‘Make in India’ push, these enterprises have come out of the shadows to the forefront, proving that when it comes to driving growth and innovation, only the soaring numbers matter, not the size.

The Indian government schemes have played a very important role in enhancing the resilience of the MSME sector post-Covid. Initiatives like the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) and the Emergency Credit Line Guarantee Scheme (ECLGS) give loans that are collateral free which has reduced risk for lenders and made it easier for MSMEs to secure funding without pledging any assets.

Digitisation of the loan application process is yet another way the government has made things easier for MSMEs. Online portals like Udyam Registration have helped in streamlining the paperwork, reducing processing times and easer application process for loans.

Sameer Mahandru thinks that Digitisation is not just a buzzword, it’s a game changer for the MSMEs. Not only has the government made it easier to take loans, but the whole process of running a business has become faster and cost effective.

It is important that MSMEs move towards digitisation in all their other operations, as technology adoption is the only way to survive.

Another way the government is pushing for MSME growth is by partnering with specialised institutions like SIDBI and introducing new credit assessment models based on digital footprints, which help in objectively evaluating MSME creditworthiness and faster loan approvals.

Even after all these efforts MSMEs face few roadblocks like any other business. The most important problems that they face are market access constraints, limited visibility, modest branding and competition from larger firms.

Patchy infrastructure and supply chain hiccups don’t help either, opines Mahandru.

However, holding an optimistic view, Mahandru believes that challenges might be the daily grind for MSMEs, but every hurdle is just another opportunity in disguise. With the right mind set and a dash of innovation, these enterprises won’t just survive but thrive.

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