The sixth edition of The Economic Times MSME Awards opened on Tuesday in New Delhi with a clear signal: India’s micro, small and medium enterprises are not just participants in the growth story, they are shaping its direction at a time of global uncertainty and domestic transition.
With policymakers, founders, financiers, and ecosystem enablers in attendance, the opening segment moved swiftly beyond ceremony, focusing instead on execution, resilience, and the structural shifts underway across the MSME landscape.
Setting the tone, Pranbihanga Borpurzari, Senior Associate Editor, The Economic Times, framed the evening as a tribute not just to businesses, but to the people behind them.
“Tonight, we are not merely celebrating businesses; we are celebrating courage, risk-takers, job creators, innovators, and dreamers who build something bigger than themselves.”
That human lens, Borpurzari noted, remains central to the sector’s economic significance.
“MSMEs power India’s economic engine at the grassroots, often far from major urban centres, carrying growth into the heart of the nation,” Borpurzari added
From economic backbone to growth driver
Building on this, Dr Rajneesh (IAS), Additional Secretary and Development Commissioner, Ministry of Micro, Small and Medium Enterprises, situated the sector firmly within India’s macroeconomic framework.
“More than 31% of India’s GDP and over 35% of exports come from MSMEs; the key point is that MSME-led growth is inherently inclusive, with over 34 crore people employed in the sector,” Dr Rajneesh explained.
He added that the sector’s contribution goes beyond scale, extending into economic stability itself.
“The resilience of MSMEs is manifesting in the resilience of the Indian economy; even through the Covid-19 shock, India was able to recover quickly, and MSMEs had a significant share in that turnaround.”
At a time when advanced economies continue to post modest growth, he pointed to India’s relative outperformance.
“While advanced economies like the US and Europe have grown at around 1 to 2%, India has sustained close to 6% growth over the past decade, and recently posted over 8% quarterly growth…this is despite global headwinds,” Dr Rajneesh elucidated.
Navigating uncertainty, expanding outward
The opening also acknowledged the shifting global context, from supply chain disruptions to evolving trade alignments.
“Today’s awards take place at a moment of profound global uncertainty; supply chains are shifting, and even domestic-focused firms are not insulated from global shocks,” Borpurzari noted.
For exporters, the implications are structural.
“Diversification is no longer optional; it is a strategic necessity,” Borpurzari added.
Echoing this, Dr Rajneesh underscored India’s policy stance of outward engagement.
“Despite global headwinds, India continues to believe in collaboration; the number of free trade agreements signed in recent years reflects this approach, and MSMEs are central to this outward-looking growth strategy,” Dr Rajneesh affirmed.
Formalisation gathers pace
One of the most significant shifts underway is the rapid formalisation of the MSME base, a transition that is beginning to reshape access to finance, markets and policy benefits.
“In 2023, about 1.65 crore MSMEs were formally registered; within a span of three years, this number has increased to nearly 7.8 crore, reflecting the inherent dynamism of the sector,” Dr Rajneesh said.
This growing formal footprint is making MSMEs more visible to lenders, platforms and supply chains, opening up new pathways for scale.
Credit access and correcting the risk narrative
Access to finance remains a central theme, particularly as MSMEs expand and integrate into more formal economic structures.
Borpurzari pointed to liquidity constraints as a persistent challenge, noting that delayed payments pose a persistent constraint, with large volumes of dues locked in the system.
Responding to this, Dr Rajneesh addressed long-held concerns around credit risk.
There is a perception that lending to MSMEs carries high risk; we believe this is a misconception, current NPA levels in the MSME sector are around 3.45%, which is comparable to the non-MSME segment,” Dr Rajneesh said.
He noted that policy interventions are already beginning to shift credit flows.
“In the past three years alone, cumulative credit guarantees have scaled to nearly Rs 9 lakh crore, demonstrating the sector’s ability to absorb and effectively utilise capital when supported by the right frameworks,” Dr Rajneesh surmised.
Rewiring working capital flows
Beyond traditional lending, newer financial mechanisms are beginning to reshape MSME liquidity, particularly around receivables.
“Platforms like TReDS are changing the landscape; what earlier required waiting for 45 days can now be addressed through real-time invoice discounting once the invoice is accepted,” Dr Rajneesh said.
The scale of adoption reflects this shift.
“Bill discounting on TReDS has grown from about Rs 4,300 crore in 2022 to over Rs 7 lakh crore in a short span,” he added.
This evolution signals a broader transition towards more responsive, technology-enabled financial ecosystems for MSMEs.
Enabling scale without disincentives
Policy has also begun to address a long-standing structural constraint, the fear among MSMEs of losing benefits as they grow.
“We have revised the MSME classification criteria, increasing turnover limits and investment thresholds to create space for enterprises to grow without losing benefits,” Dr Rajneesh said.
He added that the transition between categories is now being eased.
“Even when an enterprise moves from micro to small or small to medium, the benefits continue for a defined period,” Dr Rajneesh added.
Access to finance has also been eased at the entry level.
“The collateral-free loan limit has been increased from Rs 10 lakh to Rs 20 lakh, reducing barriers for smaller enterprises,” Dr Rajneesh explained.
Beyond policy, a shift in perception
Even as policy frameworks evolve, both speakers pointed to the need for a parallel shift in how MSMEs are perceived.
“The real question is not just how to adopt new tools, but how to remain relevant as technologies evolve,” Borpurzari noted, cautioning against over-indexing on tools over fundamentals.
“Technology should be an enabler; what endures is the ability to deliver value consistently,” Borpurzari added.
Dr Rajneesh reinforced this by addressing misconceptions around MSME capability.
“Many believe MSMEs lack technological depth or supply chain reliability; this is a myth, they are already integral to large industrial value chains,” Dr Rajneesh said.
He pointed to their growing role in complex ecosystems.
“Public sector enterprises are sourcing over Rs 1,500 crore annually from MSMEs, and even in advanced programmes like Chandrayaan, more than 400 components have been developed through MSME-linked technology centres,” Dr Rajneesh explained.
A sector at an inflection point
As the awards recognised enterprises across multiple categories, the broader narrative remained clear, India’s MSME sector is at a critical juncture.
Policy direction is increasingly focused on execution, digital and financial infrastructure is expanding, and formalisation is accelerating. The next phase of growth will depend on how effectively these elements translate on the ground.
Returning to the human core of the sector, Borpurzari concluded: “The story of every successful MSME is not about machines or software; it is about people who chose to build, even when failure was a real possibility.”
The ET MSME Awards has IDBI Bank as the Banking and Lending Partner, The New India Assurance Co. Ltd. as the General (Non-Life) Insurance Partner, and CareEdge Ratings as the Evaluation Partner. For more information, visit etmsmeawards.com.
Source Name : Economic Times