Convergence of MSME Schemes : NITI Aayog Report
NITI Aayog has released a report titled “Achieving Efficiencies in MSME Sector through Convergence of Schemes”, outlining a strategic roadmap to strengthen the effectiveness of government support for India’s Micro, Small and Medium Enterprises (MSMEs).
- It recommends a two-pronged approach for convergence of 18+ MSME schemes, comprising information convergence and process convergence.
- The first integrates central and state data for better decisions. The second unifies schemes to reduce redundancy and streamline service delivery, fostering a cohesive MSME ecosystem.
- NITI Aayog advocates converging 18+ MSME schemes to eliminate fragmentation.
- The sector is vital, contributing ~30% to GDP and 45% to exports.
- Fragmented schemes across ministries reduce efficiency and outreach.
- NITI Aayog’s convergence framework integrates data and processes to create a simplified, efficient, and outcome-driven MSME support system.
- MSMEs are businesses defined and categorized based on their investment in plant, machinery, or equipment and their annual turnover and are the foundation stone of India’s economic framework.
- Government spending on the MSME sector has risen sharply to Rs 22,094 crores in 2023-24 from Rs 6,717 crores in 2019-20.
- The MSME sector is classified in accordance with the Micro, Small and Medium Enterprises Development (MSMED) Act, 2006, based on investment in plant and machinery and turnover, with a revised classification effective from 1st April, 2025.
- The MSME sector contributes between 27% and 30% to India’s GDP, employs 62% of the country’s workforce (approximately 28.13 crores), and accounts for about 45% of the country’s exports.
- The sector grew at an average of 8.6% between 2000 and 2016, outperforming the industrial sector (7.6%), and has the capacity to produce 6,000 distinct products.
- Over 90% of MSMEs in India continue to operate in the informal sector, with only 9% transitioning from unregistered status. To promote formalization, the government has introduced the Udyam Registration Portal and the Udyam Assist Platform (UAP).
