National Manufacturing Day is celebrated every year to recognize the contribution of the manufacturing sector to the country's industrial development and economic prosperity. On this occasion, special attention is given to the role of Micro, Small, and Medium Enterprises (MSMEs), as these enterprises are considered the foundation of India's industrial and economic structure.
The importance of MSMEs also lies in their ability to promote innovation and competition by being part of the supply chain for larger industries. Additionally, these enterprises strengthen the country's industrial foundation by maximizing the use of local resources with lower capital investment. In this way, MSMEs are not only essential for the development of the manufacturing sector, but they also play a significant role in overall economic progress, export growth, and maintaining socio-economic balance.
Contribution of MSMEs in the Manufacturing Sector
MSME are a vital part of India's manufacturing sector and play a significant role in its sustainable development. These enterprises strengthen small industries at the local and regional levels, keeping industrial activities vibrant in every corner of the country. Currently, there are around 6.3 crore MSMEs in India, contributing to 30 percent of the country's total GDP and nearly 48 percent of total exports. Their contribution can be understood through the following points:
1. Employment Generation and Utilization of Local Resources: MSMEs are one of the largest sources of employment in the country, providing jobs to around 110 million people. These enterprises create job opportunities, especially in rural areas, by utilizing local skills and labor, which helps reduce issues like migration. Additionally, MSMEs efficiently utilize local resources for production, which not only reduces costs but also enhances regional economic development. For instance, the growth of agriculture-based industries, handicrafts, and village industries has been made possible through these enterprises.
2. Supply Chain Development and Innovation: MSMEs are a crucial part of the supply chain for larger industries. They supply raw materials, manufacture small equipment, and provide various services, ensuring a seamless production process for larger enterprises, thereby improving productivity and efficiency across the entire manufacturing sector. In recent years, MSMEs have rapidly adopted innovation and technological advancements, leading to increased productivity and competitiveness. Their technological progress in the digital age has also helped establish them on a global scale.
Industrialist and Entrepreneurs Bharath Bommai Said, MSMEs in the manufacturing sector are the lifeblood of India’s industrial ecosystem, driving innovation, creating employment, and strengthening socio-economic infrastructure. Their contribution is pivotal as they not only foster entrepreneurship but also enhance production capabilities, resulting in increased exports and a significant share of the nation's GDP.
As India aims to become a $5 trillion economy by 2026-27, the MSME sector is poised to grow to $1 trillion by 2028. The relaxation of FDI policies and tax incentives for MSMEs has further accelerated this growth, attracting global investments and enhancing competitiveness. MSMEs, with their entrepreneurial spirit, are the backbone of communities, especially in rural and marginalized areas, where they create opportunities and inspire self-reliance.
By embracing digitalization, sustainable practices, and upskilling, MSMEs are not only adapting to global competition but thriving in it. On this National Manufacturing Day, we must acknowledge and celebrate the resilience, creativity, and relentless drive of MSMEs. Their growth is directly linked to the nation’s progress, as they generate employment, promote innovation, and contribute significantly to India’s journey toward becoming an economic powerhouse.
Role of MSMEs in National Economic Development
The importance of MSMEs is not limited to the manufacturing sector. They act as a catalyst for overall economic development. MSMEs play a crucial role in local and regional development, as they establish industries in small towns and villages, boosting the local economy, which leads to the development of rural areas and reduces dependence on urban development. Furthermore, MSMEs create new opportunities for self-employment and entrepreneurship for women and youth, making women's increasing participation a symbol of economic empowerment and social progress.
MSMEs contribute approximately 48 percent to India's total exports, which not only strengthens the country's economic position but also helps realize initiatives like 'Make in India' and 'Atmanirbhar Bharat.' Additionally, MSMEs have provided stability to the country during times of economic crisis; during the COVID-19 pandemic, when large industries were struggling, MSMEs quickly reorganized themselves to maintain production and supply on a small scale, ensuring that economic activities did not come to a halt.
Thanos Technologies, CEO and Co-founder, Pradeep Palelli Said, “MSMEs play an essential role in the economic growth of India and are the backbone of the manufacturing industry of the country. On the occasion of National Manufacturing Day, it is important to highlight how these businesses drive innovation, create jobs, and support sustainable growth. As an MSME ourselves, Thanos Technologies has evolved from being just small contributors in the technology landscape to becoming the front runners in the industry. Our agricultural drone solutions help reduce labor issues, save water, and also eliminate harmful manual practices like.
Boosting on the ‘Make in India’ initiative of the Government of India, we are proud to manufacture all our drones in India, which also aligns with the. By setting up manufacturing units in Hyderabad, we are creating jobs and making sure our advanced solutions are affordable for Indian farmers. This move to local production also strengthens our industrial economy, reduces reliance on foreign sources, and helps us maintain top-notch quality. As we grow, we remain committed to our mission and vision of contributing to the economic progress of India.”
Challenges and Opportunities
MSMEs face several challenges, such as a lack of capital, insufficient technical knowledge, and the complex processes associated with government schemes and loans. To address these issues, the government and the private sector must work together.
Recently, the government has launched several initiatives, such as the Pradhan Mantri Mudra Yojana, Startup India, GST exemptions, and the development of e-marketplaces, to provide financial and technical support to MSMEs. Additionally, efforts are being made to promote digitization and innovation, enabling MSMEs to stay competitive on a global scale.
Conclusion
On the occasion of National Manufacturing Day, we must recognize and support the crucial role of MSMEs. They are not only the backbone of the manufacturing sector but also important pillars of economic development, job creation, and socio-economic balance. The growth and empowerment of MSMEs are essential for India to move towards becoming a strong, self-reliant, and prosperous nation. Therefore, it is necessary for all of us to work together to promote MSMEs and address the challenges they face so that they can continue to play a vital role in the country's economic progress in the future.
