MSME Employee Count Soars Over 5x Since 2020: FinMin, India

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India’s Department of Economic Affairs (DEA) has unveiled a striking surge in Micro, Small, and Medium Enterprises (MSMEs) employment, as per its latest monthly economic report. The data, which sheds light on the employment landscape within the MSME sector, indicates a remarkable 5.3-fold increase in the number of individuals employed by MSMEs registered under the Udyam portal since its inception in July 2020.

According to the report, the total workforce engaged in MSMEs, registered via the Udyam Registration Portal, has surged from 2.8 crore in July 2020 to a substantial 15.3 crore as of February 9, 2024. This exponential growth underscores the concerted efforts to bolster employment generation within the MSME sector, signifying a significant milestone in India’s economic trajectory.

The surge in MSME employment is attributed to several policy interventions aimed at fostering an enabling business environment. The revised definition of MSMEs, effective from June 1, 2020, has played a pivotal role in facilitating investments and employment opportunities. Additionally, initiatives such as the Emergency Credit Link Guarantee Scheme (ECLGS) have alleviated liquidity constraints, contributing to a reduction in Non-Performing Assets (NPAs) and enhancing financial stability within the sector.

The positive trajectory in MSME employment, coupled with the decline in gross non-performing assets (GNPA) in the MSME portfolio of scheduled commercial banks (SCBs), underscores the resilience and potential of India’s small business ecosystem. As policy measures continue to fortify the MSME landscape, India’s entrepreneurial sector is poised for sustained growth and economic empowerment.

The exponential growth in MSME employment underscores the pivotal role of small businesses in driving economic prosperity and fostering inclusive development. As policy measures continue to fortify the MSME ecosystem, the sector is poised for sustained growth, heralding a promising future for India’s entrepreneurial landscape.