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MSME definition, role and importance – all you need to know.

What is MSME?

MSME stands for Micro, Small and Medium Enterprises. MSMEs are primarily engaged in producing, processing, or preserving products and materials. In India, MSMEs contribute nearly 8% of the country’s GDP, around 45th of the producing output, and roughly 400th of its exports. Therefore, It won’t be wrong to refer to them as the “Backbone of the country”.

MSMEs are crucial for the Indian economy and have contributed a lot to socio-economic development. There are around 6,08,41,245 MSMEs in India as per the government’s annual report (2018-19).

Features of MSMEs

Following are the number of the essential components of MSMEs:

Role of MSMEs in the Indian Economy

Since the formation of MSME, this sector has proved to be an extremely dynamic Indian economy sector. MSMEs turn out and manufacture a range of products for each domestic, additionally as international markets.

They help to promote the expansion and development of textile, village, and fibre industries. They need to collaborate and work with ministries, state governments, and stakeholders towards the rural area’s upbringing.

MSMEs have a vital role in providing employment opportunities in rural areas. However, as a complementary unit to massive sectors, the MSME sector has contributed significantly to its socio-economic development.

MSMEs also contribute and play a vital role in the country’s development in several areas, just like the demand of low investment, flexibility in operations, quality through the locations, low rate of imports, and a high contribution to domestic production.

Importance of MSMEs for the Indian Economy

Across the world, MSMEs are considered as an economic process method and promote development.

MSMEs have driven India to new heights through the basics of low investment, flexible operations, and the capability to develop acceptable local technology.

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