UN MSME Day

UN MSME Day

The UN General Assembly in its 74^th Plenary held on the 6^th April, 2017 declared 27^th June as Micro, Small and Medium-sized Enterprises Day, recognizing the importance of Micro, Small and Medium-sized Enterprises in achieving sustainable development goals and in promoting innovation, creativity and sustainable work for all.

Micro, Small and Medium-sized Enterprises

What is a micro-, small, or medium-sized enterprise?

The criteria for defining the size of a business differ from country to country. In India, the definition of micro-, small and medium-sized enterprises is established according to Investment in Plant & Machinery/equipment and Annual Turnover.

• A micro enterprise is an enterprise where the investment in plant and machinery or equipment does not exceed Rs 1 crore and turnover does not exceed Rs 5 crore;
• A small enterprise is an enterprise where the investment in plant and machinery or equipment does not exceed Rs 10 crore and turnover does not exceed Rs 50 crore; and
• A medium enterprise is an enterprise where the investment in plant and machinery or equipment does not exceed Rs 50 crore and turnover does not exceed Rs 250 crore.

All enterprises are required to register online on Udyam Registration Portal and obtain ‘Udyam Registration Certificate’. 

According to the data provided by the International Council for Small Business (ICSB), formal and informal Micro-, Small and Medium-sized Enterprises (MSMEs) make up over 90% of all firms and account on average for 70% of total employment and 50% of GDP.

These enterprises, which generally employ fewer than 250 persons, are the backbone of most economies worldwide and play a key role in developing countries. These types of enterprises are responsible for significant employment and income generation opportunities across the world and have been identified as a major driver of poverty alleviation and development.

MSMEs tend to employ a larger share of the vulnerable sectors of the workforce, such as women, youth, and people from poorer households. MSMEs can even sometimes be the only source of employment in rural areas. As such, MSMEs as a group are the main income provider for the income distribution at the "base of the pyramid".

How they contribute to the achievement of the Sustainable Development Goals

Micro, small and medium sized enterprises are vital in achieving the Sustainable Development Goals, in particular in promoting innovation, creativity and decent work for all.

Efforts to enhance access to finance for SMEs across key sectors of national economies are an important element of implementation of the Sustainable Development Goals (SDGs). SDG targets 8.3 and 9.3 call for enhancing the access of SMEs to financial services. In addition, SMEs are an important element in the implementation of SDG 8 (decent work and economic growth) and SDG 9 (industry, innovation and infrastructure.

Theme for 2022 : MSMEs -Resilient recovery

This year we celebrate the 5th anniversary of the Micro, Small and Medium-sized Enterprises Day - MSME Day.  Small businesses are the backbone of our economies. They account for over 70% of businesses and more than 50% of jobs around the world. 

Resilient recovery is the focus of this year’s events. We honour the entrepreneurs in societies everywhere as they face the triple threat of COVID-19, conflict and climate.

The COVID-19 crisis has taught us that the pandemic and containment measures do not impact everyone in the same way. Among the private sector, Micro-, Small and Medium-sized Enterprises (MSMEs), especially those led by women, youth, ethnic minorities and migrants, suffered the most. An International Trade Centre survey on COVID-19 impact among businesses in 136 countries has shown that nearly 62% of women-led small businesses have been strongly affected by the crisis, compared to just over half of firms led by men, and women-owned are 27% more likely not to survive the pandemic.

Did you know?

• 600 million jobs will be needed by 2030 to absorb the growing global workforce, which makes SME development a high priority for many governments around the world.
• In emerging markets, most formal jobs are generated by SMEs, which create 7 out of 10 jobs.
• Increasing annual investments in small and medium-sized enterprises by $1 trillion would yield disproportionate dividends in terms of progress towards the Sustainable Development Goals.
• Small firms in developing countries are among the most concerned about climate change: 68% of companies in sub-Saharan Africa say that environmental risks are significant to their business, according to research by the International Trade Centre (ITC). Half of surveyed companies in developed countries say the same.

Source : UN

Initiatives taken by Ministry of MSME on Covid-19 relief in India

Micro, Small and Medium Enterprises (MSME) sector has emerged as a highly growing and dynamic sector of the Indian economy over the last decade. India
has more than 6 crore entities falling under the MSME category.

As per Central Statistics Office (CSO), share of MSMEs in the Gross Value Added (GVA) in All India Gross Domestic Product (GDP) for the year 2020-21 is 30%. Further, as per 73rd Round of National Sample Survey (NSS) Report on Unincorporated Non-Agricultural Enterprises’ (July 2015-June 2016), 11.10 crore workers are estimated to be in the MSME sector.

The growth of Micro, Small and Medium Enterprises depends on various factors such as access to market, quality of products, availability of timely credit, upgradation of technology etc. For capacity building of Indian MSME sector, Ministry of MSME is implementing various schemes for skill development, technology upgradation, marketing support and access to credit to MSMEs. Besides, a provision has been made in Public Procurement Policy which mandates 25 % of annual procurement from Micro and Small Enterprises (MSEs) by Central Ministries/Departments and CPSEs, thus providing marketing opportunities to MSEs for their growth and development.

To counter the impact of Covid 19, Government has taken a number of initiatives under the Atmanirbhar Bharat Abhiyaan to support the MSME sector. Some of them are:

• The Emergency Credit Line Guarantee Scheme (ECLGS) that has helped 130 lakh MSMEs mitigate the worst impact of the pandemic, has been extended  till March 2023, guaranteed cover extended by another Rs 50,000 crore, a critical step that is likely to provide a boon to lending in the MSME sector.
• Credit Guaranteed Scheme for Subordinate Debt (CGSSD) is operationalized through a special window created for this purpose under Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE). Guidelines of the Scheme have been revised and the Scheme has also been extended till 31.03.2023.
• Special Entrepreneurship Promotion Drive for Women – “SAMARTH” launched on the occasion of International Women’s Day 2022. Under the Samarth initiative of the Ministry, following benefits will be available to aspiring and existing women entrepreneurs:
  • 20% Seats in free Skill Development Programs organized under skill development schemes of the Ministry will be allocated for Women. More than 7500 women will be benefitted.
  • 20% of MSME Business Delegations sent to domestic & international exhibitions under the schemes for Marketing Assistance implemented by Ministry will be dedicated to women owned MSMEs.
  • 20% Discount on annual processing fee on NSIC’s Commercial Schemes Special Drive for registration of women-owned MSMEs under Udyam Registration

Ministry of MSME also launched Zed Certification Scheme, an initiative to certify Indian MSMEs based on well defined parameters of quality, safety, production, cleanliness, energy, and environment etc. This scheme will provide financial support on system, testing and product certifications and for handholding and technology upgradation also, Zed certification scheme will also includes upto 95% subsidy on certification cost. 

Given the sector's significant contribution to the economy, the Budget has increased outlay for the sector from Rs. 15,699.65 Crores in 2021-22 to Rs 21,422 crores in 2022-2023.