What is MSME?
MSME stands for micro small and medium enterprises. MSME enterprises are engaged in the manufacturing, processing, and production of goods and services and are categorized into two classes: manufacturing and service enterprises. Manufacturing enterprises are engaged in the production of goods, whereas service enterprises are engaged in providing services.
The MSME Development Act (MSMED)was launched in 2006, and since then, MSMEs have become a significant and integral part of the economy. MSMEs in India produce over 6,000 unique products, contribute to ~48% of the country’s exports, and have a 45% share in the manufacturing sector. After China, India has the largest base of MSMEs in the world, contributing to ~30% of the country’s GDP. In short, MSMEs act as a backbone of the economy.