Overview
MSME Day, observed annually on June 27, is designated by the United Nations General Assembly to recognize the vital role that Micro, Small, and Medium Enterprises (MSMEs) play in fostering inclusive and sustainable economic development globally. This day celebrates the immense contributions of MSMEs to economic growth, employment generation, and poverty reduction.
Importance of MSMEs
MSMEs form the backbone of many economies, especially in developing countries. They operate across various sectors, including manufacturing, services, agriculture, and trade, driving innovation, entrepreneurship, and local development. According to the United Nations Conference on Trade and Development, MSMEs, both formal and informal, constitute over 90% of all companies worldwide, employ an average of 70% of the total workforce, and contribute 50% to global GDP.
Challenges Faced by MSMEs
Despite their significance, MSMEs face numerous challenges, particularly in accessing finance. The International Finance Corporation (IFC) reports that around 65 million firms, or 40% of formal MSMEs in developing countries, have an unmet financing need of $5.2 trillion annually. This gap is equivalent to 1.4 times the current level of global MSME lending. Regional disparities also exist, with East Asia and the Pacific accounting for the largest share of the finance gap, followed by Latin America and the Caribbean, and Europe and Central Asia.
MSMEs in India
India is home to approximately 63 million MSMEs, second only to China’s roughly 140 million micro and small enterprises. Indian MSMEs contribute about 30% to the GDP, over 40% to exports, and have created 110 million jobs. According to the government Udyam registration portal, 46 million MSMEs are registered, reporting 200 million jobs.
World MSME Day vs. National Small Industry Day
In addition to World MSME Day, India observes National Small Industry Day annually on August 30. This day celebrates the contributions of small-scale industries to the country’s growth. The Indian government launched an extensive policy package for small industry on August 30, 2000, and since then, National Small Industry Day has been observed to recognize the efforts and achievements of small industries in India.
Conclusion
MSME Day serves as a platform to highlight the significant contributions of MSMEs to the global economy and raise awareness about the challenges they face. With continued support and initiatives, MSMEs can further drive economic growth and prosperity, both in India and worldwide.