Faster economic growth requires increased share of the manufacturing sector in GDP, particularly of MSMEs. Comment on the present…

MSMEs contribute about 30% to GDP and around 36% to manufacturing output (and about 45% of exports), but their growth is constrained by credit, technology and market access. The statement is broadly correct, but policies remain incomplete. With Make in India targeting 25% manufacturing GDP by 2025, policies show partial progress. PMEGP’s micro-enterprise creation is useful but limited in scale, while CGTMSE and ECLGS improved collateral-free credit and pandemic liquidity; yet credit remains concentrated in larger units. The revised MSME definition, using investment and turnover (with limits raised 2.5x and 2x in Budget 2025–26), and RAMP programme’s cluster approach address formalisation and productivity, but implementation is uneven. The same Budget announced a National Manufacturing Mission. PLI schemes, though important for large-scale manufacturing, have limited MSME coverage; sector-specific MSME clusters are needed. Digital initiatives, Udyam Registration, MSME Samadhaan and the 45-day payment rule under Section 43B(h) of the Income-tax Act for delayed payments, and OCEN for credit access, have improved transparency and grievance redressal. Overall, policies have strengthened formalisation and credit, but faster growth requires deeper technology upgradation, better market linkages, scale-up finance and global competitiveness.