Leading SMEs of India 2023

54 | Leading SMEs of India 2023 [ INDIAN SME SECTOR OVERVIEW ] The banking credit to industry, which accounts for approximately 30% of total outstanding credit grew by 7.8% in FY22, the highest rate since last 8 years. Within industry sector, credit to MSME grew by 33% in FY22. All these points towards strong capital formation byMSMEs which pushes for infrastructure growth. Bes ides , Indi an MSMEs are increasingly becoming part of global supply chain acrossmultiple sectors. Government initiatives for export promotions, Production Linked Incentive (PLI) schemes are further expected to spur export growth. SYSTEM In the “new normal world”, MSMEs needs to vigorously adopt digital technologies to compete globally. Acknowledging thi s , Indi an MSMEs have started integrating digital technologies like artificial intelligence, machine learning, data analytics, and internet of things to expand their business operat ions , of fer var i et y of products & services to customers, and explore new markets. However, the pace of technology adoption is very slow in MSMEs as compared to large businesses. Further, digital technologies will play a major role in enhancing sustainability aspects of MSMEs. Given that India has set a target to reduce emissions intensity of its GDP by 45% by 2030, from 2005 levels, MSMEs are expected to play significant role. Against this backdrop, various governmentmeasures like creation of online marketplaces, facilitating digital payment systems, and schemes for enhancing technology & sk i l l set s are expec ted to boost the integration of digital technology with MSMEs. This will eventually help MSMEs improve their positioning in India as well as globally, thereby reach their true potential. DEMOGRAPHY As per the latest estimates and projections of global population from United Nations, in Apri l 2023, India is estimated to have overtaken China as the world’s most populous country. India’s population is expected to grow till 2060s, giving rise to a huge working age population. It is necessary to channelize the energy of the youngor workingpopulation into nation building activities by focusing on developing vocational, technical, and managerial skills. In this regard, MSMEs, especially in semi-urban and rural areas with their large-scale employment potential, can create employment opportunities at regional level, thereby helping to avoid the forced migration to urban areas. As of June 2023, 16.9 mn MSMEs have provided employment to 118 million people, which implies employment to approximately 7 people per MSME unit. Out of total employment, around 24% are women employees, which points towards greater role of MSMEs in empowering women. Besides, MSMEs are also accredited for nurturing entrepreneurial skills amongst women and social ly weaker sections of society DEMAND ‘Demand’ , the l as t pi l l ar of Aatmanirbhar Bhavishya, aims to strengthendomesticdemandwhile improving the supply chain tomeet the growing demand through local products. MSMEs play a crucial role in both demand creation and improving the supply chain tomeet the growing domestic demand. Indian MSMEs has huge potential for employment generation at comparatively lower capital costs can help boost income levels. This sets a multiplier effect by further creatingdemand for local products and improving domestic utilization levels. Moreover, MSMEs with robust manufacturing base and diversified products are taking advantage of the “China Plus One” strategy adapted by multinationals and thereby becoming integral part of global supply chains. Dun & Bradstreet