Micro, Small and Medium-sized Enterprises Day, 27 June

The General Assembly declared 27 June as Micro, Small and Medium-sized Enterprises Day, to raise public awareness of their contribution to sustainable development and the global economy. In 2021, the theme is "MSME 2021: key to an inclusive and sustainable recovery."

Hyderabad: The General Assembly declared 27 June as Micro, Small and Medium-sized Enterprises Day, to raise public awareness of their contribution to sustainable development and the global economy. In 2021, the theme is "MSME 2021: key to an inclusive and sustainable recovery."

MSMEs: Key to an inclusive and sustainable recovery

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.

Micro, Small and Medium-sized Enterprises

As governments vaccinate their populations, the world continues to deal with several other challenges that include the ongoing effects of climate change, biodiversity loss, and surging pollution. If unabated, these three crises are expected to have severe negative implications for economic growth, human health and ecosystems, employment and livelihoods. What lessons can we capture from the COVID-19 response to ensure that MSMEs are resilient to the looming climate crisis, and are drivers of an inclusive transition towards more sustainable economies?

Formal and informal MSMEs make up over 90% of all firms and account, on average, for 70% of total employment and 50% of GDP. As such, they are key actors in achieving a green recovery.

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 the surveyed companies in developed countries say the same.

India: Revised Classification applicable w.e.f 1st July 2020

Composite Criteria: Investment in Plant & Machinery/equipment and Annual Turnover

Classification- Manufacturing Enterprises and Enterprises rendering Services

Micro- Investment in Plant and Machinery or Equipment: Not more than Rs.1 crore and an annual turnover not more than Rs. 5 crores.

Small-Investment in Plant and Machinery or Equipment: Not more than Rs.10 crore and an annual turnover not more than Rs. 50 crores.

Medium-Investment in Plant and Machinery or Equipment: Not more than Rs.50 crore and an annual turnover not more than Rs. 250 crores.

As of 31.12.2020, a total number of 5,37,677 enterprises have registered under the manufacturing category whereas 8,65,058 enterprises registered under the Service sector.

• The Top 5 Industrial sectors of registrations are – Food Products, Textile, Apparel, Fabricated Metal Products and Machinery & equipment.

• Registration without PAN is permitted up to 31.03.2021 as a transitional arrangement.

• Similarly, Registration without GST number is also permitted up to 31.03.2021 as a transitional arrangement.

MSME Sector Contributes Significantly to Indian Economy

The Micro, Small and Medium Enterprises (MSMEs) sector contributes significantly to the Indian Economy in terms of Gross Domestic Product (GDP), Exports and Employment generation.

As per the information received from the Central Statistics Office (CSO), Ministry of Statistics & Programme Implementation (MOSPI), the share of MSME Gross Value Added (GVA) in total GVA during 2016-17 was 31.8%.

As per the information received from the Directorate General of Commercial Intelligence and Statistics (DGCIS) the Share of MSME related Products in total Export from India during 2018-19 is 48.10%.

As per the 73rd Round of National Sample Survey (NSS), conducted by the Ministry of Statistics & Programme Implementation during the period 2015-16, the estimated number of workers in unincorporated non-agriculture MSMEs in the country are 11.10 crore.

Under the Prime Minister’s Employment Generation Programme (PMEGP,) the estimated employment generated (number of persons) in micro-enterprises during the years 2014-15, 2015-16, 2016-17, 2017-18 and 2018-19 are 3.58 lakhs, 3.23 lakhs, 4.08 lakhs, 3.87 lakhs and 5.87 lakhs, respectively.