New wave of digital economy & role of micro, small & medium (MSMs) in India

Micro, Small and Medium Enterprises (MSMEs) have been playing an important role in the overall economic development of a developing country like India, where millions of people are unemployed or underemployed. MSMEs seem to be a small and insignificant part of the economy but employ 40% of the total population of India i.e for the second largest workforce after agricultural sector. They constitute of 90% of the total industrial units and are responsible for 45% of industrial output and 40% of the total exports. Their labour intensive nature and even geographical distribution results in employment opportunities for both self-employed and job seeking people promoting equity and inclusive growth. MSMEs is minimising the unemployment problems through dividing employment with lower investment. The economic development of any country primarily depends upon the establishment of industries. The development of this segment is extremely critical to meet the national imperatives of financial inclusion and generation of significant levels of employment across urban, semi-urban and rural areas of the country. Further, it can nurture and support development of new age entrepreneurs who have the potential to create globally competitive businesses from India. The time is right for Indian MSMEs to pursue digitalization—whereby digitized resources, such as cloud-based software and machines equipped with digital sensors, are transformed into new sources of profitable revenue. Digitalization is real, and a growing number of Indian enterprises are already reaping handsome rewards from it. Heightened awareness now needs to be backed by a real workable digitalization action plan. This sector has been regarded as engine of economic growth and social development in regional and national level. This paper mainly focuses on the contribution of MSMEs to the Indian economy in terms of economic growth, employment generation, fostering equitable and enhancing potential industrial base of the country. The paper also analyses that despite some infrastructural deficiencies, lack of skilled persons and inadequate market linkages, but this sector has registered remarkable success with regard to increase in number, quantum of investment, scale of production, export promotion and overall contribution to national GDP, and digitalisation.