MSME Sector: Formalisation, Digitalisation & Credit Reforms

The MSME sector is transitioning from an informal, cash-based economy to a formal, data-driven ecosystem. The definition is now linked to Investment and Turnover (composite criteria), removing the distinction between Manufacturing and Services. The sector is currently witnessing a "Digital Formalisation" wave, where creditworthiness is assessed via digital transaction trails (GST/UPI) rather than physical collateral.

The Grassroots Industrial Base

  • Micro Enterprises: The largest segment (accounting for >99% of MSMEs) gaining access to institutional credit.
  • Traditional Artisans: Vishwakarmas (carpenters, blacksmiths) integrated into the formal skill/credit framework.
  • Women Entrepreneurs: Major beneficiaries of targeted schemes like Stand-Up India and Mudra (Mahila Udyam).
  • Fintech Lenders: Entities leveraging ....
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