India’s MSME Sector Shows Recovery Post-COVID, Reaches 30.1% GDP Contribution: Govt Data

New Delhi, Jul 25 (KNN) In a significant development for India's economic landscape, recent government data reveals that the Micro, Small, and Medium Enterprises (MSME) sector is steadily regaining its footing after the COVID-19 pandemic shock.

The sector's contribution to India's gross domestic product (GDP) has shown a marked improvement, though it is yet to fully recover to pre-pandemic levels.

According to information presented in the Rajya Sabha by Shobha Karandlaje, Minister of State in the MSME Ministry, the share of MSME gross value added (GVA) in India's GDP reached 30.1 per cent in the fiscal year 2022-23.

This represents a continued upward trajectory from 29.6 per cent in FY22 and 27.3 per cent in FY21, the year most severely impacted by the pandemic.

The MSME sector's share had peaked at 30.5 per cent in FY20, just before the onset of the COVID-19 crisis. While the latest figures show substantial recovery, they indicate that the sector is still striving to surpass its pre-pandemic performance.

This resurgence is particularly noteworthy given the ambitious targets set by former MSME Minister Nitin Gadkari in 2020. Gadkari had envisioned the MSME sector contributing 40 per cent to India's GDP by 2025, along with a 60 per cent share in exports and the creation of 5 crore additional jobs.

The MSME Ministry's Udyam portal currently lists 4.76 crore registered enterprises, highlighting the sector's vast scale and importance to the Indian economy. Of these, approximately 70.56 lakh are manufacturing enterprises, while a substantial 2.06 crore operate in the services sector.

It's worth noting that nearly 2 crore micro enterprises remain in the informal sector, operating outside the Goods and Services Tax (GST) framework.

In terms of exports, the MSME sector has also shown signs of recovery. After three consecutive years of decline, the sector's share in India's total exports increased to 45.73 per cent in FY24.

This marks a reversal from the downward trend observed since FY20, when the share stood at 49.73 per cent.

While the sector has made significant strides, challenges remain in fully realising its potential and meeting the ambitious targets set by the government. Continued support and targeted policies will be essential to further boost this vital component of India's economy.

(KNN Bureau)