Report underscores MSMEs’ key challenges
NITI Aayog has released a report titled “Designing a Policy for Medium Enterprises”, offering a comprehensive roadmap for transforming medium enterprises into future growth engines of India’s economy https://www.investindia.gov.in/.
The report, released on 26 May, highlights the critical, yet under-leveraged role played by medium enterprises and outlines targeted interventions to unlock their full potential http://msme.gov.in.
The report was launched by Suman Bery, Vice Chairman, NITI Aayog in the presence of Dr V.K. Saraswat, Member, NITI Aayog and Dr Arvind Virmani, Member, NITI Aayog.
The report delves into the structural skew in the MSME sector, which contributes approximately 29% to India’s GDP, accounts for 40% of exports, and employs over 60% of the workforce.
Despite its critical role, the composition of the sector is disproportionately weighted: 97% of registered MSMEs are micro enterprises, 2.7% are small, and only 0.3% are medium enterprises.
However, this 0.3% of medium enterprises contributes nearly 40% of MSME exports, underscoring their untapped potential as scalable, innovation-led units. The report identifies medium enterprises as strategic actors in India’s transition towards self-reliance and global industrial competitiveness under Viksit Bharat @2047.
The report underscores key challenges faced by medium enterprises, including constrained access to tailored financial products, limited adoption of advanced technologies, inadequate R&D support, lack of sectoral testing infrastructure, and a mismatch between training programmes and enterprise needs. These limitations hinder their ability to scale and innovate.
To address these issues, the report outlines a comprehensive policy framework with targeted interventions across six priority areas:
Tailored Financial Solutions: Introduction of a working capital financing scheme linked to enterprise turnover; a Rs.5 crore credit card facility at market rates; and expedited fund disbursal mechanisms through retail banks, overseen by the Ministry of MSME.
Technology Integration and Industry 4.0: Upgradation of existing Technology Centers into sector-specific and regionally customized India SME 4.0 Competence Centers to promote the adoption of Industry 4.0 solutions.
R&D Promotion Mechanism: Establishment of a dedicated R&D cell within the Ministry of MSME, leveraging the Self-Reliant India Fund for cluster-based projects of national significance.
Cluster-Based Testing Infrastructure: Development of sector-focused testing and certification facilities to ease compliance and enhance product quality.
Custom Skill Development: Alignment of skilling programmes with enterprise-specific needs by region and sector, and integration of medium enterprise-centric modules into existing Entrepreneurship and Skill Development Programmes (ESDP).
Centralized Digital Portal: Creation of a dedicated sub-portal within the Udyam platform featuring scheme discovery tools, compliance support, and AI-based assistance to help enterprises navigate resources effectively.
The report emphasizes that unlocking the potential of medium enterprises requires a shift toward inclusive policy design and collaborative governance. With strategic support in finance, technology, infrastructure, skilling, and information access, medium enterprises can emerge as the drivers of innovation, employment, and export growth, said NITI Aayog. Fiinews.com
