MSME Sector

The Micro, Small and Medium Enterprises (MSME) sector in India plays a crucial role by providing large employment opportunities, industrialization of rural areas, reducing regional imbalances, etc.

  • The MSME sector contributed 33% of industrial GVA and 31% of industrial Gross Domestic Product (GDP) at constant prices (base 2011-12).
  • The sector faces problems in terms of getting adequate, cheap and timely availability of institutional credit.
  • The decline in credit to MSME sector can be attributed to deteriorating health of public sector banks due to piling up of NPAs.
  • Recently, RBI has brought some changes in priority sector lending guidelines for MSME Sector by including a sub-target of 7.5% of Adjusted Net Bank Credit for lending to ‘Micro’ enterprises.

Pradhan Mantri Mudra Yojana

The Government has initiated the Pradhan Mantri Mudra Yojana for development and refinancing activities relating to micro industrial units. The purpose of MUDRA is to provide funding to the non-corporate small business sector. The Government has also set up Micro Units Development and Refinance Agency (MUDRA) Bank.

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