MSME Day: History and Significance

• MSME Day, observed worldwide on June 27, puts the spotlight on micro, small and medium enterprises.

• The day reminds everyone that these firms generate nearly one-third of India’s GDP, contribute about half of our exports and create millions of local jobs.

• The sector counts 6.30 crore enterprises (5.93 crore formally registered), employs over 25 crore people and shipped 45.73% of India’s exports in 2023-24, a powerhouse second only to agriculture for job creation and growth.

India first put small businesses on the policy map in October 1999 by creating a single Ministry for Small-Scale Industries, Agro Industries and Rural Units. Within two years, officials realised each segment needed sharper focus. In September 2001, the Ministry was split: one arm handled urban small industries, while the other took care of agro-based and village enterprises.

A bigger shift arrived on 9 May 2007. Following another policy review, the two arms were reunited under a single banner, the Ministry of Micro, Small and Medium Enterprises (MSME). This all-in-one ministry now drafts schemes, releases credit lines and tracks every programme aimed at helping tiny workshops grow into stable employers.

Global recognition soon followed. In April 2017, the United Nations General Assembly passed a resolution naming 27 June as Micro, Small and Medium-sized Enterprises Day. The goal is straightforward: to remind governments and investors everywhere that small firms are crucial for inclusive growth.

A month later, the UN rolled out a specialised project, “Enhancing National Capacities for Unleashing the Full Potential of MSMEs in Achieving the Sustainable Development Goals.” Funded by the 2030 Agenda’s Peace and Development Sub-Fund, this programme trains developing countries to give their MSMEs the tools, skills and finance needed to meet today’s global challenges.

Small enterprises matter because they spread growth where big factories rarely reach. They give weavers, mechanics, coders and street-food innovators a legal pathway to earn, hire and pay taxes, often with very little capital. The MSME Act 2006 enshrined this idea into law and established clear turnover limits, ensuring incentives reach the right doors.

Because they spread opportunity far beyond major metropolitan areas, the government treats them as engines of balanced growth. It has built a safety net that can turn a two-person workshop into tomorrow’s exporter.

Across India, MSME days are packed with workshops, exhibitions and seminars that pair budding founders with mentors, lenders and tech partners. Many sessions even walk participants through financing tools, such as online business loans and EMI calculators, so they can assess repayment plans before making a decision.

The aim is simple: help small enterprises find the right people, money and ideas to level up faster.

Micro Small and Medium Enterprises Day 2025 Theme: “Business for MSMEs – Connecting the Entrepreneurs”

Every MSME Day carries a fresh focus. It will be celebrated on June 27, as in previous years, and this year’s theme, “Business for MSMEs – Connecting the Entrepreneurs,” celebrates the power of networking and shared knowledge.

Why the Sector Matters

• Jobs and income flow to villages and small towns, easing migration pressure on metros.

• Government buyers must now give preference to MSME suppliers, thereby maintaining a steady order book.

• Strict rules on payment timelines protect tiny vendors from crippling cash-flow gaps.

• A national council brings together entrepreneurs, bankers and officials, allowing new policies to address real-world hurdles quickly.

Who Does What

State governments carry the main responsibility for promoting MSMEs. The Union Ministry of MSME steps in as a partner and enabler, topping up state efforts through easy-to-use schemes that offer:

• Credit lines from banks and NBFCs;

• Help with technology upgrades and modern machinery;

• Ready-to-use industrial sheds and common facilities;

• Modern labs for testing and quality certification;

• Training in modern management and digital skills;

• Design, packaging and product-development aid;

• Welfare schemes for artisans and workers;

• Marketing support at home and abroad;

• Cluster-level capacity-building so firms can grow together.

The government of India rolls out several schemes in the MSME sector, each of which aims to redefine the sector and help these businesses grow in numbers. Here are the five prominent and high-impact schemes that you should be aware of:

Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE)

Need a bank loan but have no property to pledge? CGTMSE lets you borrow up to ₹5 crore without collateral. The government and SIDBI back up to 85% of the lender’s risk, so banks see you as a safer bet.

Women-led firms and those in the North-East even receive higher coverage. You still repay the loan like any other; the guarantee is simply your virtual security deposit.

Prime Minister’s Employment Generation Programme (PMEGP)

Starting a manufacturing or service unit? PMEGP contributes a one-time subsidy to your project cost, amounting to 25% in cities and 35% in villages.

Borrow up to ₹50 lakh (manufacturing) or ₹20 lakh (services); KVIC credits the subsidy straight to your bank loan, lowering what you owe. Submit a viable business plan online and attend a short EDP training, and you are good to go.

Self-Reliant India (SRI) Fund Empowering MSMEs for Atmanirbhar Bharat

The Self-Reliant India (SRI)Fund channels fresh capital into specialised “daughter funds,” which then invest in promising MSMEs through equity, quasi-equity and soft-debt.

By doing so, it fuels faster scale-ups, helps high-potential firms leap into national and global leagues and backs businesses that build home-grown tech, goods and services - exactly the ingredients of an Atmanirbhar (self-reliant) Bharat.

Khadi Gramodyog Vikas Yojana - Umbrella Scheme

The Khadi Gramodyog Scheme enhances village industries by upgrading looms and workspaces, enabling khadi artisans to earn better wages and secure steady livelihoods.

Funds are allocated toward modern equipment, revamped sales outlets and expanded marketing, both domestically and internationally, reviving traditional skills while boosting production, employment and exports across rural India.

ASPIRE Scheme - A Scheme for Promotion of Innovation, Rural Industries and Entrepreneurship

The ASPIRE Scheme builds Livelihood Business Incubators in rural and underserved pockets, where locals can test ideas, learn new agro-tech skills and launch formal micro-enterprises that create jobs close to home.

Each incubator can receive up to ₹1 crore (₹75 lakh for private promoters) for plant and machinery, plus an additional ₹1 crore toward staffing, training programs, and day-to-day operations. By seeding skilled talent and practical innovation near farm clusters, ASPIRE feeds nearby industrial hubs with ready human capital and keeps the rural MSME engine competitive.

When MSME registration first appeared in 2006, a firm’s size was judged only by how much it spent on plant and machinery. Over time, that single yardstick felt outdated, so annual turnover was added, and the old split between “manufacturing” and “services” was scrapped, making the rules easier to follow.

Budget 2025 has relaxed the MSME size limits, and the new thresholds apply from 1st April 2025. Here is how the caps have changed:

For context, the earlier limits were far tighter; micro firms, for instance, could invest only ₹1 crore and have a turnover of ₹5 crore. By widening the thresholds, the government allows growing outfits to retain their MSME benefits for longer, giving them more time to scale, hire, and compete without losing access to low-cost credit, subsidies and procurement preferences.

Running a micro or small enterprise in India can feel like steering a hand-built boat through choppy waters. Here are some of the major roadblocks faced by MSMEs:

• Money Problems: Banks like collateral and thick credit files; most small firms have neither. Even organisations that promise “easy loans” often involve paperwork that young entrepreneurs cannot decode or guarantors they do not have. So, growth plans sit in drawers, waiting for cash that never lands.

• Customer Issues: A boutique handicraft unit in Kutch or a food-processing shed in Assam may produce gems, but shipping costs, middlemen and lack of e-commerce skills limit their audience. Without bigger markets, at home and abroad, sales plateau long before the product’s true potential unfolds.

• No Access to Newer Tools: New machines, cloud software and energy-efficient tech boost output and cut costs, yet many MSMEs still rely on ageing equipment because upgrades look expensive and risky. The result? Lower productivity and trouble matching competitors who’ve already modernised.

• Rules & Regulations: From GST filings to local permits, compliance can feel like a full-time job. Different offices require different forms, which are seldom available online and rarely in a single language. Every hour spent shuttling between desks is an hour lost from actually running the business.

• Lack of Skills and Training: Innovation requires fresh ideas, but skilled technicians and digital marketers often prefer larger paychecks from corporations. Owners often end up training newcomers from scratch or doing it all themselves, which slows product development and stalls expansion.

MSME Day is more than a feel-good celebration; it serves as a spotlight and matchmaker rolled into one, guiding MSME business owners toward real solutions for their everyday problems.

• Fresh Routes to Money: Banks may stay cautious, but MSME Day brings lenders that think differently. Many NBFCs give collateral-free loans. On-site desks explain paperwork and interest terms, so owners walk away knowing exactly how to fund a new machine or marketing push.

• Up-to-date Skills: The Institute for Industrial Development frequently hosts pop-up workshops throughout the week. Founders and staff pick up lean-manufacturing tips, digital-marketing basics or quick GST refreshers that make compliance less scary and output more efficient.

• Ready Business Advice: Stalls from consultants, universities and nonprofit groups provide free one-on-one sessions on pricing, bookkeeping, branding and export rules. A 15-minute chat can steer a firm toward better inventory software or introduce them to a cluster-level quality lab.

• Built-in Networking: Panel talks and buyer–seller meets put small suppliers face-to-face with big retailers, e-commerce platforms and state-run procurement teams. Many leave with sample orders or, at the very least, a new contact in their phone.

• Access to Grants and Subsidies: Government officers set up kiosks detailing current subsidy slabs and soft-loan schemes. Entrepreneurs can submit interest forms on the spot, cutting weeks off the usual chase.

MSMEs are the heartbeat of India’s economy, creating jobs, sparking innovation and spreading prosperity far beyond big cities. MSME Day reminds us of their grit, the progress made through new schemes, and the work still left to tackle cash crunches, tech upgrades and skill gaps.

Yet, even the best government support cannot shield a small enterprise from sudden shocks, such as fire, theft or workplace injuries. That is where the right small business insurance cover matters. A tailored TATA AIG SME Insurance policy cushions you against property loss or business interruption so that you can reopen doors quickly after a setback.

Pair it with a Workmen Compensation Policy and you also protect the people who power your shop floor, covering medical costs and wage replacement if an accident occurs. With the support of a reputed insurance for small business partner like TATA AIG in place, owners can focus on growth, confident that one bad day will never erase years of hard work and ambition.