From new classification to a separate division in the Ministry, India’s micro-MSMEs need differentiated support

economictimes.indiatimes.com:

MSME sector, which contributes to 30% of India’s GDP and nearly 50% of India’s exports. As India aims to become a $5 trillion economy by 2026, it has never been more critical than now to expand support to the MSME sector, and particularly provide differentiated support for the micro-MSMEs.Institute new classification Micro-MSMEs are categorised as having less than Rs. 5 crores in turnover, however, over half of micro-MSMEs have less than Rs.

50 lakhs in turnover with 2-3 workers, often family members. These types of outfits must have policies supporting their needs that do not equate them to the regulations applicable for a nearly 5 crore type of a business. The challenges faced by an entrepreneur who is in a single location with just two employees is very different from the multi-location entrepreneur with more than 100 workers.

Their scale of operations, resource constraints, and growth potential differ significantly from small and medium enterprises requiring tailored support that addresses their specific needs. There is a need for further classification within the micro enterprise segment. This sub-categorisation would differentiate micro enterprises based on their specific industries, such as manufacturers, ancillary units, exporters, and service providers.