Executive Summary

Micro, Small, and Medium-Sized Enterprises (MSMEs) are considered as the backbone of the Indian economy, employing more than 11 crore people and also account for 30% in the nation’s GDP and industrial output. The Indian government has implemented a number of laws and programs to support the growth and viability of MSMEs across the country as the growth and development of India’s economy depend heavily on MSMEs. Exports, industrial output, job generation, innovation, and inclusive socio economic development are all specifically impacted by this industry. Irrespective of the government incentives, the MSMEs still face resource constraints and lack competencies to sustain in regional and global markets (Abe & Proksch, 2017). The Institute of Small Enterprises and Development (Kochi, India) reported in the India MSME Report 2018 that MSMEs need revolutionary reforms to solve their critical issues and utilise their full potential. Hence, problems including limited financial availability, infrastructure barriers, technological limitations, limited knowledge of marketing tactics and the challenge of regulatory compliance need to be resolved if MSMEs are to reach their full potential. The current study provides detailed information on various government incentives for the MSME sector and also evaluates the impact assessment of important schemes in the present scenario. 

Keywords: MSMEs, schemes, government, economy

Introduction

According to the United Nations, MSMEs account for 90% of all enterprises, create 60–70% of jobs, and contribute 50% of the world’s GDP. In addition to being economic organizations, these businesses serve as the foundation of societies, creating jobs and promoting inclusive growth, particularly for working poor people, women, young people, and vulnerable populations. One of the most important policy concerns in the nation is the promotion of MSMEs since their contribution to the economic growth of highly developed industrialized countries (like Germany and Japan) cannot be understated. From the past five decades, the MSME sector has emerged as one of the dynamic and vibrant sectors of the Indian economy. MSMEs are the economy’s main driver of growth. They act as catalysts for the nation’s social and economic advancement, eradicating inequality. By taking Gandhian philosophy as a traditional ideology, MSMEs have remained high on the development agenda of governments, policymakers and scholars all the time (Abe & Proksch, 2017; Baporikar & Deshpande, 2015). In this regard, the Indian government has taken a number of steps to solve the problems MSMEs confront in order to achieve the goal of creating a $5 trillion economy for the country.

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