Hurt in Covid-19, MSMEs recover slowly as initiatives for them continue

Share of credit outstanding to MSMEs by scheduled commercial banks as a percentage of outstanding non-food credit is tepid

Micro, small and medium enterprises (MSME) are a vital contributor to India's growth, but their share in the economic pie has stagnated over the years despite initiatives for credit access, formalisation and employment.

 

The MSME Ministry has a target of increasing the sector's contribution to the Gross Domestic Product (GDP) to 50 per cent by 2025. It is likely to miss the deadline, as the economic impact of Covid-19 weighs on industries. MSMEs' share in the GDP was 32.2 per cent in FY15 and declined to 30.5 per cent in FY20 (pre-pandemic level). It fell further to 27.3 per cent