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SIDBI published a report titled "Understanding Indian MSME Sector: Progress and Challenges"

Access to capital, technology adoption, competition, compliance, market access, infrastructure, supply chain, and the availability of skilled labour across 19 manufacturing, service, and trading sectors are some of the major issues

Deeksha Upadhyay 15 May 2025 12:09

SIDBI published a report titled "Understanding Indian MSME Sector: Progress and Challenges"

Role of MSMEs in Economic Development

Contribution to Gross Value Added: 30.1% for FY2022-23.

Export contribution: 45.79% in FY2024-25 (as of May 2024).

Key Issues in the MSME Sector

Limited access to credit: Owing to the absence of formalization, poor credit history, and unawareness of credit programs, inability to access capital markets due to necessary transparency and regulatory standards, etc.

Intense rivalry and technological integration: A swiftly changing business environment necessitates the adoption of innovative technologies, which is a

Significant obstacle, since numerous MSMEs do not possess the necessary resources and knowledge to utilize technology effectively.

Others: Complicated regulatory environment, insufficient infrastructure, expensive and inconsistent utility supply, challenges in sourcing basic materials and trained workforce.

Main initiatives for MSMEs

Union Budget 2025-26: Updated categorization of MSMEs, Credit Cards for Micro Enterprises, establishing a new Fund of Funds, improved Credit Assurance, National Production Objective to assist Clean Technology production, etc.

MSME Development Programs: Financing Scheme for Micro and Small Enterprises Guarantee Businesses, fresh Credit Evaluation

Framework for micro and small businesses derived from their online traces as revealed in the Union Budget of July 2024, etc.

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