In 2024, Indian MSMEs found themselves navigating a year of significant shifts and challenges as the sector faced a complex environment shaped by evolving global markets, domestic policy changes, and persistent structural issues. Despite these hurdles, MSMEs continued to demonstrate both resilience and adaptability even as the year brought a mix of progress and persistent challenges.
While strides were made in areas like job creation and enterprise formalization, inflationary pressures and access to credit remained key concerns. Growth in certain sub-sectors showcased the sector’s potential, but the uneven distribution of gains highlighted lingering disparities that continue to impact smaller enterprises.
Below are the developments offering a closer look at how MSMEs navigated 2024— a year that brought both opportunities and obstacles:
Business closures and job loss: 61,469 registered MSMEs were closed as of November 15, 2024 since the launch of the Udyam portal on July 1, 2020. Over 12,000 MSMEs were shut in the last four months with the total count of closed units growing from 49,342 as of July 25, 2024 and 13,290 in FY23. The total job loss reported due to the closure of MSMEs as of July 2024 was 3,17,641.
MSME registrations: There was a notable increase in MSME registrations, with over 5.77 crore enterprises registered on the Udyam Portal as of December 31 from around 3.20 crore registered till year-end 2023, reflecting the growing formalisation of the MSME sector.
Export contribution: The value of MSME exports during the eight-month (April-November) period in the current financial year stood at Rs 12.39 lakh crore, surpassing Rs 8.55 lakh crore worth of MSME exports recorded in the entire FY23. Moreover, the total number of MSMEs exporting goods till November in the current fiscal was 1.73 lakh, compared to 1.53 lakh in the entire FY24 and 1.21 lakh in FY23.
Job creation: MSMEs reported approximately 9 crore additional jobs in 2024, up from over 15 crore last year to 24.3 crore this year. Meanwhile, according to the National Sample Survey (2015-16), the MSME sector comprising 6.33 crore unincorporated non-agriculture units has generated 11.10 crore jobs (360.41 lakh in manufacturing, 0.07 lakh in non-captive electricity generation and transmission, 387.18 lakh in trade and 362.82 lakh in other services).
Credit access: According to the latest data on sectoral deployment of bank credit to micro and small enterprises under priority sector lending, credit surged by 13.9 per cent in October to Rs 26.34 lakh crore from Rs 23.11 lakh crore in October 2023. The credit deployment to MSEs in October was 15.7 per cent of India’s non-food credit of Rs 167 lakh crore, marginally up from 15.5 per cent in October last year.
The credit flow by scheduled commercial banks to the MSME sector in FY24 grew by 20.6 per cent to Rs 27.25 lakh crore from Rs 22.60 lakh crore in FY23, indicating growth in formal credit accessible to MSMEs.
MSMEs’ growth: Between July 1, 2020, and July 24, 2024, a significant number of enterprises transitioned to medium enterprises. During the financial year 2020-21 to 2021-22, 714 Micro enterprises scaled up to medium and 3,701 small enterprises were upgraded to medium enterprises.
This number increased steadily with FY2023-24 to FY2024-25 witnessing further growth as 2,372 micro enterprises and 17,745 small enterprises scale up to medium.