Empower MSMEs In Rural India To Realise The Goal Of Inclusive Atmanirbhar Bharat

India boasts of one of the world’s youngest populations, yet the potential of its rural youth remains untapped. Moreover, an uneducated populace often lacks the understanding necessary to participate effectively in governance, leading to weak civic engagement

I foresee a great role for micro, small and medium enterprises (MSMEs) located in rural areas in realizing the goal of inclusive Atmanirbhar Bharat. From giving employment to maximum individuals to putting a check on the exodus of countryside people to urban areas in search of greener pastures or sustainable livelihoods, MSMEs can work wonders. As we wish to be a developed and self-reliant nation by 2047, there is a need to intensify efforts to expand their presence and vibrancy in rural areas, which will also give a big boost to the local economy, ensuring financial empowerment of the locals.

According to the Union Ministry of Micro, Small and Medium Enterprises, MSMEs exports have witnessed a remarkable rise, increasing from Rs. 3.95 lakh crore in 2020-21 to Rs. 12.39 lakh crore in 2024-25, underscoring their critical role in boosting the country’s economy and strengthening global trade. The total number of exporting MSMEs in 2024-25 also increased from 52,849 in 2020-21 to 1,73,350 in 2024-25. They demonstrated an exemplary growth trajectory, contributing 45.73 per cent to exports in 2023-24, which increased to 45.79 per cent by May 2024, highlighting their growing impact on India’s trade performance.

The Gross Value Added (GVA) by MSMEs in the GDP was 29.7 per cent in 2017-18, rising to 30.1 per cent in 2022-23. Even during the Covid-19 pandemic, the sector sustained a contribution of 27.3 per cent in 2020-21, rebounding to 29.6 per cent in 2021-22. As on July 22, 2024, the total employment reported by the MSMEs on Udyam Registration Portal and Udyam Assist Platform was 20.51crore.

with more than 6.30 crore enterprises as on January 1, 2025, and an employment of 24.14 crore, it has emerged as a dynamic sector of the economy, fostering entrepreneurship and generating employment opportunities at comparatively lower capital cost, next only to agriculture. Over 50 per cent of them are located in rural India.

We cannot think of socio-economic and political equality without the holistic empowerment of marginalized and deprived sections of the society for which they need to be provided with gainful job opportunities. As rural India is blessed with vibrant agriculture and allied sectors, micro enterprises – where the investment in plant and machinery or equipment does not exceed one crore rupees and annual turnover does not exceed Rs. five crore – and small enterprise – where the investment in plant and machinery or equipment does not exceed Rs. 10 crore and annual turnover does not exceed Rs. 50 crore – must be encouraged to align themselves accordingly. In order to ensure that they don’t have to struggle for a skilled workforce, higher secondary schools must impart suitable skills to their students from Class VIII onwards.

For all this to happen in an institutional manner, a new approach has to be adopted by all stakeholders in the public and private sectors to bring in more resilience in MSMEs in rural areas. The pace of their formalization should be increased. Their integration into the business ecosystem through digital interventions, and ensuring that they take care of their employees well in terms of digital salary disbursements, extending insurance benefits and leaves as per the norms.

If possible, MSMEs should also adopt at least two children of each employee and pay their tuition fee if needed so that they are not deprived of education. Now most of the senior secondary schools in rural areas have been upgraded to 10+2. This has been done in Bihar. After completing their school education, when they get into a higher education institution (HEI), MSME owners should help them financially.

We need to understand that the rural populace constitutes a significant portion of the total population, with about 65 per cent of our people residing in villages. Limited access to education in rural areas restricts skill development, resulting in a workforce that is unprepared for modern job markets. Poor educational standards further exacerbate the divide between urban and rural communities. It limits opportunities for upward mobility, reinforcing cycles of poverty and marginalization.

India boasts of one of the world’s youngest populations, yet the potential of its rural youth remains untapped. Moreover, an uneducated populace often lacks the understanding necessary to participate effectively in governance, leading to weak civic engagement.

Building well-equipped schools with adequate classrooms, libraries, and technological tools is the first step. Rural areas need modern facilities that match urban standards, along with basic amenities like clean drinking water and sanitation. An active MSME ecosystem in rural areas will help in leveraging technology to provide e-learning resources to students.

Similarly, aligning education with local needs and employment opportunities is essential. Vocational training in agriculture, handicrafts, and small-scale industries can make rural youth employable and entrepreneurial. Collaborative efforts between the government and MSMEs will help in pooling resources and expertise to create impactful educational programmes.

However, we empower rural MSMEs so that they rise to occasion with all confidence and resilience. They need to be guided and encouraged to reap the benefits of various government schemes meant for them.

For example, collateral free loan of up to Rs. 500 lakh with effect from 1.4.2023 with guarantee coverage up to 85 per cent for various categories of loan through Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) under the Credit Guarantee Scheme. The central government has rolled out the Raising and Accelerating MSME Performance (RAMP) programme with an outlay of Rs. 6,000 crore over five years. It is a World Bank-supported programme that aims to improve the performance of MSMEs. The programme was launched on June 30, 2022.

‘PM Vishwakarma’ Scheme was launched on September 17, 2023 to provide end to end holistic benefits to the artisans and craftspeople engaged in 18 traditional trades, namely, carpenter; boat maker; armourer; blacksmith; hammer and tool kit maker; locksmith; goldsmith; potter; sculptor; cobbler; mason; basket, mat, broom maker or coir weaver; doll and toy maker; barber; garland maker; washerman; tailor and fishing net maker.

This programme can also be aligned with rural MSMEs for better results and their sustainable developments.

Private and public sector banks should come to rural areas with a special mechanism aimed at empowering local MSMEs.

It will do a world of good if they are provided with critical support, including financial boost.

(The writer is a senior journalist, author and columnist. The views expressed are strictly his personal)