Monday, August 21, 2017

MSME Sector India - Vision 2020 - 2025 - 2030- 2035

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CII - MSME Sector -

Grant Thornton - FICCI MSME Sector Vision 2020
MSME contributes 8% to India's GDP. Next to Agriculture this is the biggest single biggest grouping.


10 (100 million)  Crore Units - 20 Crore (200 million) Employees - Vision for Micro Units Facilitated by MUDRA Finance Scheme

The last NSSO survey puts the number of micro units at 6 crore (60 mil) and number of employees at 11 crore (110 mil). There is an opportunity to promote one crore (10 million) new firms and provide employment to another one crore (10 million) persons employment through MUDRA finance giving one lakh crore rupees to new firms and giving another one lakh crores to firms with plan to give employment to one more person. This requires two lakh crores as priority Mudra finance and another 1.5 lakh crores can be given to other micro units. Thus the government and Mudra agency can target Rs. 3.5 lakh crore credit under Mudra for the year 2018-19. The target for this year 2017-18 is Rs. 2.44 lakh crores. So providing additonal Rs. 1.06 lakhs crore is within the feasibility tests.

In four years, with the above plan for credit, the employment in micro units can be raised to Rs. 20 crores. The number of units will go up to 10 crore.

Of course many changes are to be brought into micro units promotion and financing based on inputs from users, facilitators, regulating agencies and banks. Research studies from various agencies - academic institutions, NGOs, banks, industry and business associations, and government agencies are needed to identify potential powerful ideas which need to be implemented.

The author of this blog, Prof. K.V.S.S. Narayana Rao is presently involved in a research project on Mudra Finance. The project is based on a survey of MPs,  Bankers and District Industries Centers.

Please give your suggestions and opinions to improve the scheme through comments for improving it.

Or send email to kvssnrao55 at gmail dot com

The Rs 9-lakh crore MSME industry is likely to double in the coming years, and to reach that kind of size and scale, automation will play a big role.


This table probably presents the right picture of MSME in India.

 (at 2004-05 prices)
Year          Gross Value of       Share of MSME sector in total GDP (%)      Share of MSME
                 Output of MSME    Manufacturing   Services           Total               Manufacturing
                 Manufacturing         Sector MSME   Sector MSME                         output in total
                 Sector                                                                                                 Manufacturing
                 (` in crore)                                                                                          Output (%)
2006-07    1198818                    7.73                  27.40                35.13                 42.02
2007-08    1322777                    7.81                  27.60                35.41                 41.98
2008-09    1375589                    7.52                  28.60                36.12                 40.79
2009-10    1488352                    7.45                 28.60                 36.05                 39.63
2010-11    1653622                    7.39                 29.30                 36.69                 38.50
2011-12    1788584                    7.27                 30.70                 37.97                 37.47
2012-13    1809976                    7.04                 30.50                 37.54                 37.33

Source for the table  Table 2.3 Annual Report 2015 - 16 of Ministry of MSME, Government of India

MSME census 2007 -


The share of Micro, Small & Medium Enterprise (MSME) contribution to GDP will significantly increase from the current 8 percent to 15 percent by 2020, according to a study report by KPMG-CII.

The MSME sector contributed 8% to India's GDP  for 2011-12. India has the potential to increase the share of contribution to GDP from its MSME sector from current 8 percent to about 15 percent by the year 2020," it said.

According to study,  employment to the extent of 50 percent of the overall employment representing 300 million jobs across agricultural, manufacturing and services sectors will be provided by MSME.

The GDP growth rate is likely to achieve 8.5 percent level and India is expected to be an approximately USD 5 trillion economy by the year 2025.

Government of India has announced founding a apex bank to fund MSME sector through indigenous money lenders and small banks. It also announced Credit Guarantee fund for MSME units. Thus it has taken steps to increase bank credit/finance support to MSME sector in India.

Updated   20 August 2017 ,  12 April 2017,   30 July 2016,  17 June 2015

1 comment:

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