The Ministry of micro Small and Medium Enterprises is one of the most vital departments of the Government of India, tasked with the development and promotion of micro, small, and medium-sized enterprises (MSMEs) across the country. It plays a crucial role in strengthening India’s industrial base, generating employment, and supporting innovation and entrepreneurship at the grassroots level.
About the Ministry of Small and Medium Enterprises
The Ministry of Small and Medium Enterprises, also referred to as the Ministry of MSME, is responsible for formulating policies, implementing schemes, and providing strategic support to India’s vast MSME sector. This sector contributes significantly to India’s GDP, exports, and job creation, making it the true backbone of the Indian economy.
Ministry of Micro, Small & Medium Enterprises (M/o MSME) envision a vibrant MSME sector by promoting growth and development of the MSME Sector, including Khadi, Village and Coir Industries, in cooperation with concerned Ministries/Departments, State Governments and other Stakeholders, through providing support to existing enterprises and encouraging creation of new enterprises.
The Micro; Small and Medium Enterprises Development (MSMED) Act was notified in 2006 to address policy issues affecting MSMEs as well as the coverage and investment ceiling of the sector. The Act seeks to facilitate the development of these enterprises as also enhance their competitiveness. It provides the first-ever legal framework for recognition of the concept of “enterprise” which comprises both manufacturing and service entities. It defines medium enterprises for the first time and seeks to integrate the three tiers of these enterprises, namely, micro, small and medium. The Act also provides for a statutory consultative mechanism at the national level with balanced representation of all sections of stakeholders, particularly the three classes of enterprises; and with a wide range of advisory functions. Establishment of specific funds for the promotion, development and enhancing competitiveness of these enterprises, notification of schemes/programmes for this purpose, progressive credit policies and practices, preference in Government procurements to products and services of the micro and small enterprises, more effective mechanisms for mitigating the problems of delayed payments to micro and small enterprises and assurance of a scheme for easing the closure of business by these enterprises are some of the other features of the Act.
On 9 May 2007, subsequent to an amendment of the Government of India (Allocation of Business) Rules, 1961, erestwhile Ministry of Small Scale Industries and the Ministry of Agro and Rural Industries were merged to form the Ministry of Micro, Small and Medium Enterprises (M/o MSME). This Ministry now designs policies and promotes/ facilitates programmes, projects and schemes and monitors their implementation with a view to assisting MSMEs and help them to scale up.
The primary responsibility of promotion and development of MSMEs is of the State Governments. However, the Government of India, supplements the efforts of the State Governments through various initiatives. The role of the M/o MSME and its organizations is to assist the States in their efforts to encourage entrepreneurship, employment and livelihood opportunities and enhance the competitiveness of MSMEs in the changed economic scenario. The schemes/ programmes undertaken by the Ministry and its organizations seek to facilitate/provide: i) adequate flow of credit from financial institutions/banks; ii) support for technology upgradation and modernization; iii) integrated infrastructural facilities; iv) modern testing facilities and quality certification; v) access to modern management practices; vi) entrepreneurship development and skill upgradation through appropriate training facilities; vii) support for product development, design intervention and packaging; viii) welfare of artisans and workers; ix) assistance for better access to domestic and export markets and x) cluster-wise measures to promote capacity-building and empowerment of the units and their collectives.
Organisational Setup
The M/o MSME is having two Divisions called Small & Medium Enterprises (SME) Division and Agro & Rural Industry (ARI) Division. The SME Division is allocated the work, inter- alia, of administration, vigilance and administrative supervision of the National Small Industries Corporation (NSIC) Ltd., a public sector enterprise and the three autonomous national level entrepreneurship development/training originations. The Division is also responsible for implementation of the schemes relating to Performance and Credit Rating and Assistance to Training Institution, among others. SME Division is also responsible for preparation and monitoring of Results- Framework Document (RFD) as introduced in 2009 by the Cabinet Secretariat under Performance Monitoring and Evaluation System (PMES). The ARI Division looks after the administration of two statutory bodies viz. the Khadi and Village Industries Commission (KVIC), Coir Board and a newly created organization called Mahatma Gandhi Institute for Rural Industrialization (MGIRI). It also supervises the implementation of the Prime Minister’s Employment Generation Programme (PMEGP).
The Implementation of policies and various programmes schemes for providing infrastructure and support services to MSME’s is undertaken through its attached office, namely the Office of the Development Commissioner (010 DC (MSME)), National Small Industries Corporation (NSIC), Khadi and Village Industries Commission (KVIC); the Coir Board, and three training institutes viz., National Institute for Entrepreneurship and Small Business Development (NIESBUD), NOIDA, National Institute for Micro, Small and Medium Enterprises (NI-MSME), Hyderabad, Indian Institute of Entrepreneurship (lIE), Guwahati and Mahatma Gandhi Institute for Rural Industrialization (MGIRI), Wardha a society registered under Societies Registration Act, 1860.
The National Board for Micro, Small and Medium Enterprises (NBMSME) was established by the Government under the Micro, Small and Medium Enterprises Development Act, 2006 and Rules made thereunder. It examines the factors affecting promotion and development of MSME, reviews existing policies and programmes and make recommendations to the Government in formulating the policies and programmes for the growth of MSME.
Office of the Development Commissioner [MSME]
The Micro, Small and Medium Enterprises- Development Organisation (MSME-DO) is headed by the Additional Secretary & Development Commissioner (MSME). The Office of the Development Commissioner (Micro, Small & Medium Enterprises) assists the Ministry in formulating, co-ordinating, implementing and monitoring different policies and programmes for the promotion and development of MSMEs in the country. In addition, it provides a comprehensive range of common facilities, technology support services, marketing assistance, etc. through its network of 30 Micro, Small and Medium Enterprises-Development Institutes (MSME-Dls); 28 Branch MSME-Dls; 4 MSME Testing Centres (MSME-TCs); 7 MSME-Testing Stations (MSME-TSs); 2 MSME-Training Institutes (MSME-Tls); and 1 MSME-Technology Development Center-Hand Tools (MSME-TDC-Hand Tools). The % DC (MSME) also operates a network of Tool Rooms and Technology Development Centres (including 2 Footwear Training Institutes) which are autonomous bodies registered as Societies under the Societies Act. The Office implements a number of schemes for the MSME sector, the details of which have been duly incorporated in the booklet.
Khadi & Village Industries Commission
The Khadi & Village Industries Commission (KVIC), established under the Khadi and Village Industries Commission Act, 1956 (61 of 1956), is a statutory organization engaged in promoting and developing khadi and village industries for providing employment opportunities in rural areas, thereby strengthening the rural economy. The Commission is headed by full time Chairman and consists of 10 part-time Members. The KVIC has been identified as one of the major organizations in the decentralized sector for generating sustainable rural non-farm employment opportunities at a low per capita investment. This also helps in checking migration of rural population to urban areas in search of the employment opportunities. The main functions of the KVIC are to plan, promote, organize and assist in implementation of the programmes/projects/schemes for generation of employment opportunities through development of khadi and village industries. Towards this end, it undertakes activities like skill improvement, transfer of technology, research & development, marketing, etc. KVIC co-ordinates its activities through State KVI boards, registered societies and cooperatives. It has under its aegis a large number of industry-specific institutions spread in various parts of the country.
Coir Board
The Coir Board is a statutory body established under the Coir Board Industry Act, 1953 (NO. 45 of 1953) for promoting overall development of the coir industry and improving the living conditions of the workers engaged in this traditional industry. The Coir Board consists of a full-time Chairman and 39 part- time Members. The activities of the Board for development of coir industries, inter-alia include undertaking scientific, technological and economic research and development activities; collecting statistics relating to exports and internal consumption of coir and coir products; developing new products and designs; organizing publicity for promotion of exports and internal sales; marketing of coir and coir products in India and abroad; preventing unfair competition between producers and exporters; assisting the establishment of units for manufacture of the products; promoting co-operative organization among producers of husks, coir fibre, coir yarn and manufactures of coir products; ensuring remunerative returns to producers and manufacturers, etc.
The Board has promoted two research institutes namely, Central Coir Research Institute (CCRI), Kalavoor, Alleppey, and Central Institute of Coir Technology (CICT), Bengalooru for under taking research activities on different aspects of coir industry which is one of the major agro based rural industries in the country. The two major strengths of the coir industry are it being export oriented and generating wealth out of the waste (coconut husk).
National Small Industries Corporation Limited (NSIC)
- NSIC, established in 1955, is headed by Chairman-cum-Managing Director and managed by a Board of Directors.
- The main function of the Corporation is to promote, aid and foster the growth of micro and small enterprises in the country, generally on commercial basis.
- NSIC provides a variety of support services to micro and small enterprises catering to their different requirements in the areas of raw material procurement; product marketing; credit rating; acquisition of technologies; adoption of modern management practices, etc.
NSIC implements its various programmes and projects throughout the country through its 10 Zonal Offices, 46 Branch Offices, 15 SC/ST Hub Offices, 09 Sub Branch Offices, 08 Technical Service Centres, 08 Livelihood Business Incubations, 03 LBI’s in NTSCs, 03 Training Centres and 04 Business Parks.
Key Mandates of the Ministry:
- Policy formulation for MSME development
- Financial and technical assistance to small businesses
- Skill development and entrepreneurship training
- Promoting innovation and digital transformation
- Facilitating access to domestic and global markets
Major Initiatives by the Ministry of Small and Medium Enterprises
- Udyam Registration
A simplified online registration system for MSMEs to avail of government benefits and subsidies. - Credit Guarantee Scheme (CGTMSE)
Provides collateral-free loans to micro and small businesses through partnering banks. - PMEGP (Prime Minister’s Employment Generation Programme)
Financial support for setting up new micro-enterprises in rural and urban areas. - Technology Centres & Tool Rooms
Offer training and product development support using advanced technologies. - Digital MSME Scheme
Encourages small businesses to adopt digital tools, cloud platforms, and IT-based productivity solutions. - ZED Certification Scheme
Promotes Zero Defect Zero Effect manufacturing for sustainable and quality-focused growth. - MSME Champions Portal
A grievance redressal and handholding platform for MSME-related issues and support.
💡 Importance of the Ministry for India’s MSMEs
The ministry of small and medium enterprises not only supports traditional industries and startups but also fosters innovation, promotes rural entrepreneurship, and helps MSMEs compete in global markets. With its schemes and digital initiatives, the Ministry enables access to:
- Low-interest loans
- Export incentives
- Skill training programs
- Quality certification
- Market development assistance
📈 Contribution of MSMEs to Indian Economy
- Contribute 30% to India’s GDP
- Account for 45% of total exports
- Generate over 11 crore jobs
- Support over 6.3 crore enterprises across sectors
The Ministry’s continued efforts are instrumental in scaling up MSMEs and integrating them into national and global value chains.
🔗 Final Thoughts
If you’re a small business owner or aspiring entrepreneur, the Ministry of Small and Medium Enterprises is your gateway to support, growth, and innovation. With the right awareness and guidance, you can leverage its schemes to grow your enterprise sustainably.
👉 Visit the official website to explore more: https://msme.gov.in
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