The vibrancy of the Micro, Small and Medium Enterprise (MSME) sector in the macroeconomic context cannot be overstated as it accounts for 7% of India’s GDP, 45% of total manufacturing output, and 40% of Indian exports while employing over 117 million people. Given the critical importance of the sector, due attention from the financial system must be accorded to address the challenges inherent in servicing this segment.
Recognizing the significance of the sector, the Central Government announced a host of initiatives for the MSME sector. CII commends the government’s response in addressing the issues faced by the MSME sector through its twelve key initiatives announced by the Prime Minister to provide a fillip to the sector.
Based on the feedback and consultations with stakeholders, CII has come up with a set of recommendations for the short term which may be considered by the Government, RBI and other relevant authorities for dealing with the current liquidity related problems.