Role of Micro, Small Medium Enterprises

Micro, Small and Medium Enterprises (MSMEs) sector has come out as a highly vital and dynamic sector of the Indian. MSMEs play an important role in serving a large employment opportunity at the lower capital costs. Make more fair distribution of national income and wealth, reducing regional imbalances and helping the industrialization of rural and backward areas.

Micro, Small and Medium Enterprises (MSMEs) are known as engines of economic growth and for promoting overall growth. The Department of Micro, Small and Medium Enterprises was formed on 5 April 2016 to give strength to MSMEs. MSMEs sector contributes to the socioeconomic development of our country.


Types of MSMEs

MSME is divided into 3 categories

Micro Enterprises

Micro-industry is the smallest organization. Under this institution/ organization any person can spend at least 25 lakhs and in service sector the amount can spend more than 10 lakhs.

Small Enterprises

Under this small industry a person can spend between 25 lakh to 5 crores for the start up their small business. Service industries have a maximum limit between 5 crores to 2 crores.

Medium Enterprises

Under the medium organization, you can spend at least 5 crores to 10 crores in business and the maximum limit for service enterprises is 2 crores to 5 crores.

Benefits of MSMEs Registration

  • Easy Access To Loans From All Banks
  • Ease Of Buying Government Tender
  • Big Tax Exemption
  • Specific Subsidy On Evidence
  • Value In Value Preference
  • Reduction In Interest Rate On Loans Taken From Banks
  • Availability Of Government Tenders For Free
  • Benefit In Stamp Duty
  • Electricity Bill Discount
  • Receipt of expenses incurred in ISO Certification.
  • Production Duty Rebate


Now the government has made registration of small industries quite easy. From here you can register your business through online, today we are going to tell you how you can register online sites at home? You do not have to do anything, go to its official website; and you can register it very easily.

  1. Name of Applicant: Full Name of Applicant as mentioned on the Aadhaar Card.
  2. Aadhaar Number: Fill 12 digit Aadhaar number issued to the applicant in the appropriate field.
  3. Gender: Select the gender from provided option.
  4. Social Category: Select the Social Category of applicant from the given options.
  5. Type of Organization: Select the type of organization from the given options which will get printed on MSME certificate.
  6. Name of Enterprise / Business: Complete the name of Business / Enterprise which will get printed on MSME certificate.
  7. Mobile No: Fill the correct mobile number of applicant.
  8. Mail ID: Fill the correct Mail- ID of Applicant.
  9. Physically Handicapped: Select the status from providing options.
  10. PAN: Fill the 10 Digit Permanent Account Number in case of Limited Partnership / Co-operative / Private Limited / Public Limited.
  11. Office Address: Please provide office address, if address other than plant location.
  12. Location of Plant: Please fill the location plant address properly.
  13. Date of Commencement of Business: Fill the date of commencement of industry.
  14. Bank Account Number with IFS Code: Fill the applicant’s bank account with the bank IFS code number.
  15. Main Business Activity by Industry: Choose the main business activity from the given options.
  16. Additional details about Business: Explain the additional information about the business. (e.g. Computer programming, manufacturing of food products and software development)
  17. Number of working Person: Fill total numbers of people are employed in business.
  18. Investment in Plant & Machinery / Equipment: Submit the total investment upon Plant, Machinery, and Equipment etc. When starts the industry.
  19. Attachment: Attach scan copy of Aadhaar Card, attach or what’s app at(9112211457).

In the past year 2019, the trend of working in every field of business by creating hubs (strongholds) has started, which has led to the emergence of new concepts of employment hub. Since Independence, the concept of industrial development in India has been based on a two approach: (1) providing employment opportunities and (2) taking these opportunities to villages as a means of regional development as far as possible.

Such an approach has contributed significantly to the growth of a large number of semi-urban centers, which has allowed micro, small and medium enterprises to thrive in the country. Do in India is a very direct initiative in the form of a national campaign that needs to be adopted at two levels.

All schemes in Micro, Small and Medium Enterprises
  1. Prime Minister Employment Generation Program and Other Credit Assistance Scheme
  2. Development of Village and Khadi Industries
  3. Technology Upgrades and Quality Proof
  4. Marketing promotion scheme
  5. Entrepreneurship and Skill Development Program
  6. Infrastructure development program
  7. Survey, study and policy research scheme (w.e.f 15.10.2018)
  8. National SC-ST Hub

Employment Generation: Micro small and medium enterprises are the second biggest employment generating sector after agriculture. This sector gives employment opportunities about 120 million men & women entire India.

GDP Contribution: Near about 36.1 million units work in the country. The MSMEs contribute around 6.11% GDP of the manufacturing and 24.63% GDP from service sector activities. MSME ministry has set their target for contribution 50% of the GDP India economy becomes a $5 trillion.

Exports: It contributes around 45% of the overall exports from India.

Inclusive growth: employment opportunities provided in rural areas, especially for that person those who belonging to weaker sections in India. MSMEs work on inclusive growth in all sectors of all people.

Financial inclusion: MSMEs work on financial inclusion focus in small industry and retail sector and also works in tier-II and tier-III cities in the banking sector.

Promote innovation: MSMEs provides opportunity for new entrepreneurs to make creative products and service for boosting their business competition and growth.


Micro, Small Medium Enterprises: MSMEs are known worldwide as the pivot of overall development. In India, this sector is playing a pioneering role in promoting justified development. Micro, small and medium scale industries in our country plays an important role in the industrial economy due to low investment requirement, operational flexibility, local mobility and import substitution. MSMEs contribute 39 percent and 33 percent of the country’s total exports in terms of construction.

Although MSMEs plays an important role in the economy, trade, employment etc. of the country, this sector has not been able to develop according to its capabilities in our country because many challenges are posed obstacles in its development. We discuss some points of challenges in below:-

Inadequate financial support: expansion of MSMEs sector is possible only when public and private sector banks provide funds for various schemes, but the lack of self-promotion in lending to MSMEs especially micro enterprises are evident in all banks. For example, RBI directs that loans up to 10 lakhs be given to MSMEs without collateral security, but in reality, most banks are not giving them collateral-free loans.

Continuous decline in government support: this can be understood as a reduction in the items reserved for MSMEs. Since 1991, the items reserved for MSMEs have been cut continuously and have been opened to private and foreign entrepreneurs. In 2011, the number of reserved items has come down to just 20, which was more than 800 before 1991.

Cut-throat competition: Since 1991, MSMEs have been in a fierce competition from large indigenous and foreign enterprises to promote their products and services in the domestic and international markets, due to the liberalization phase, which threatens the existence of MSMEs especially micro enterprises.

Lack of incentives by the corporate sector: The number of big industrialists in the country is constantly increasing, but the corporate world has unfortunately neglected its social responsibility. It is essential that the corporate sector connect their enterprises with the micro and small industries of the country and provide facilities for training, skill development etc. to the small entrepreneurs at affordable rates. In the year 2011, under the National Rural Livelihood Mission announced in place of the Swarnajayanti Gram Swarozgar Yojana, the government and the corporate world have jointly planned to promote self-help groups. It is expected that the scheme will encourage MSMEs.

Limited Capital and Knowledge: MSMEs are unable to keep their plant growing for a long period due to limited capital and knowledge and often shut down after a period of time, making the loans given by banks also NPAs. Therefore, it is necessary to increase the financial support for MSMEs and to promote teaching-training through the Indian Institute of Technology (ITI) across the country.

Lack of training and development programs: MSMEs sector lags behind other sectors in the absence of appropriate need based training and development programs. MSMEs, especially micro enterprises, often thrive in the unorganized sector, as a result, they lack adequate human resources, skill management and sustainability, training, etc., which makes them comparable to other enterprises.

Lack of methods for low cost brand development: It is imperative that brand development is emphasized for goods and services produced by MSMEs because in the absence of brand image, MSMEs will have to dilute the business potential in domestic and foreign markets. But the expenditure on advertising, marketing etc. for brand development is often outside the capacity of MSMEs.

Non-availability of latest technology: MSMEs sector lags behind the competition due to technological backwardness.  MSMEs are often forced to use older technology due to the high cost of the latest technology, affecting both their production and productivity.

Lack of Adequate Networking Opportunities: The present era is truly an era of networking, but the lack of networking opportunities is ubiquitous in the MSMEs sector. As a result, the absence of MSMEs backward and forward linkage makes it difficult for MSMEs enterprises to maintain their existence in the market.


The micro, small and medium enterprise sector plays an important role in reducing regional imbalances and ensuring equitable distribution of national income and wealth. A unique feature of these enterprises is that they are widely spread across all sectors of our economy and provide a variety of goods and services to meet the needs of local and global markets. Their biggest feature is that they require very little investment and their profits are very high. The government is striving for its promotion as it plays an important role in the economic activities of the region.

Article Name
The micro, small and medium Enterprises (MSMEs) is regulated as per MSME - Act 2006. The Role of MSMEs is fuel of economic growth of India. Ministry of MSMEe makes simple process of Registration, and listed in Micro, Small and Medium Enterprise.

About the author

Dasharath Maurya

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