The critical nature of the growth of the MSME sector

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IGR Consultants have been established as go-to investment consultants in Delhi with a team of financial experts who help you navigate the world of start-up investment and financial planning in a strategized and effective manner. As an investment advisor in Delhi, extending services to other cities, we bring forth our expertise through our service to ensure you greater financial returns and resources that keep you updated on market happenings. Through the following, we shed some light on the growth imperativeness of the MSME sector.

There is a significant contribution of the Micro, Small and Medium Enterprises ( MSMEs) to the Indian economy to generate employment, constituting a major chunk of exports that stood at 48% in 2018-19 and 30 % of Gross Domestic Product (GDP). The cumulative count of workers contributing to the non-agricultural MSMEs in India is estimated to be 11 crores, giving a clearer picture of how crucial the MSME sector is in extending employment opportunities. Thus, unlocking the true potential of this sector is essential to unravel a better future of India's economy.

The vital transformation

It won't be an understatement to call MSMEs the backbone of the Indian economy, considering the huge diversity in culture, class and market situations the Indian economy bears witness to. There is a direct relation between the expansion of MSMEs into larger firms to growth in India's economic scenario. This might come with its own set of challenges. Still, this transition process is necessary wherein optimal usage of available resources and human capital can drive the growth of small and mid-sized firms to a larger scale, enabling the exponential growth of our economy. However, the path that leads to that harbours the following steps and measures that need to be implemented by the government and utilized by MSMEs.

Increase of doing business by modifications in policies

This is the foremost step that will allow the MSME sector to be set up for advancement and substantial growth by necessary modification in the labour laws, regulatory clearances and incentives dictated by the state and central policies. Enhancing the ease and convenience of doing business through streamlined processes is the cornerstone of the upward development of the MSME sector and India's economy.

The role of promoting Foreign direct investment (FDI)

A liberalized FDI policy can have a corroborative effect on the growth of the MSME sector, as witnessed in the other market sectors with scope for 100% FDI due to having one of the most liberalized policies worldwide. This will act as a magnet for investments for the much-needed injection of capital and will also allow the movement of leading-edge technology within our boundaries to yield high productivity, competitiveness and operational efficiency. This will create a snowballing effect of the generation of more jobs and a rise in tax revenue.

Use of Technology

Technology is taking the world by the storm, enveloping almost every market sector and changing the way businesses are being operated and managed. It enables businesses to grow and remain relevant in the competitive market scenario, providing an edge in the global market by leveraging what modern technology offers. It is also equally crucial for scaling business operations and establishing global trade relationships and partnerships.

Availability of desired capital

The absence of emergency capital for business sustenance can often heavily impact the MSME sector, especially during unexpected situations like the Covid-19 pandemic. It also hampers the employment possibilities with reduced ability of employee enrollment and payment and slows down the growth of small and medium enterprises. The capital injection can come as the support provided or initiates taken by the government in the form of policy interventions and schemes conducive for growth and operation at a global scale for MSMEs. Overall, capital should not act as a hurdle withholding the transformation of smaller firms into larger ones which is contrary to what the reality represents.

Over the years, the government has taken initiatives such as the 'AatmaNirbhar Bharat' scheme by shifting their focus towards extending the support MSMEs need and desire for their sustenance and development. There have been measures formulated to push domestic industries in the right direction and provide the necessary momentum through subsidies and funding support. India has the tools, capital and the power to turn around the scene related to MSMEs for the better and transform the economy but what is needed is a solid plan to fill in the missing links and provide a foundation that allows sustainable growth by meeting the demands.


IGR Consultants offers financial advisory services for individuals and start-ups to ensure greater returns on their financial investment and planning through strategic steps through expert guidance and by grasping market opportunities.