Three states—Maharashtra, Tamil Nadu, and Uttar Pradesh—have emerged as the leading regions in MSME registrations, collectively constituting 17%, 10%, and 9% respectively, according to a report titled ‘MSMEs: Unleashing the Engines of Economic Prosperity’ by real estate firm CBRE South Asia Private Limited. The Udyam registration portal, operational since July 2020, has seen substantial adoption, reflecting government efforts to bolster MSMEs through various incentives, as noted in the report.
The report highlights specific states making significant strides in this sector, with the top ten states together representing around 71% of total MSMEs registered under Udyam. Regarding Uttar Pradesh, the report underscores various initiatives, including a 50% interest subsidy for micro units (capped at Rs 25 lakh), infrastructure interest subsidies, stamp duty exemptions, and support for women entrepreneurs and MSME industrial park developers.
“Maharashtra and Tamil Nadu have also implemented policies that foster a conducive environment for MSME growth, including industrial promotion subsidies, interest rate subsidies, electricity duty exemptions, and stamp duty waivers,” states the report.
As India aims for a $5-trillion economy by 2028, MSMEs are poised to be key drivers of economic expansion. Their growth relies on access to credit for operations and expansion, alongside digitization across their operations.
“The Foreign Trade Policy enacted in March last year aims to elevate overall exports to $2 trillion by 2030. This policy provides incentives such as reduced compliance costs, quicker clearance timelines, and credit insurance, which enhance the competitiveness of export-oriented MSMEs,” cites the report.
“Enhanced competitiveness is expected to strengthen India’s manufacturing capabilities and export potential,” adds the report, noting the policy initiatives by the government (as shown in the image source from the CBRE report).
Domestically, MSMEs anticipate a surge in demand driven by a growing middle class and increased purchasing power.
“The expected growth in India’s private consumption, estimated to surpass $5 trillion by 2030 from $2 trillion in 2022, will significantly benefit MSMEs,” the report emphasizes.
The report also notes India’s construction sector, constituting about 8% of the country’s GDP, is on track to become the world’s third-largest. This presents an opportunity for enterprises in construction and associated sectors to formalize their status by registering as MSMEs.
