New Delhi, Oct 15 (KNN)  With a high revenue and employment generation coming from them, MSMEs plays a significant role in the global economy as well as in the domestic economy.

“MSMEs account for over 95 per cent of the firms, 60-70 per cent of employment, 55 per cent of Gross Domestic Product (GDP) and generate the largest share of new jobs on global scale,” said a report of the high powered Inter-Ministerial Committee.

More than 90 per cent of all firms outside the agricultural sector in developing countries are MSMEs, generating a significant portion of GDP.  In half of the high income economies, formal MSMEs employ at least 45 per cent of workforce, as compared to 27 per cent in lower income economics.

MSMEs around the world employ one-third of the working population.  Asia and the Pacific have the highest ratio of MSME employment to total employment, highlighting the importance of the sector to global economy and their importance in terms of the role they play in the global value chain.

“In India, MSMEs contribute significantly to employment generation and development in rural areas. The sector is one of the key drivers for Indian transition from an agrarian economy to an industrialised economy,” the report said.

The estimated numbers of enterprises and employment in the country have increased at an annual compound growth rate of 28.02 per cent and 26.42 per cent respectively. It has been continuously growing at a rate of 12-13 per cent per annum, far above the large sector.

 The MSME sector in India contributes about 45 per cent of the manufacturing output, 43 per cent of the total exports of the country and 8.72 per cent of its GDP.

The Inter-Ministerial Committee boosting exports from the MSME sector comprised among others, RBI Chief Raghuram Rajan who was the former Chief Economic Advisor of the committee.  (KNN/ST)