India’s most populous state Uttar Pradesh has emerged among the top three states as a significant contributor to the MSME sector, with a 9 per cent share in total registered MSMEs in the country, according to a report by realty consulting firm CBRE South Asia and real estate developers association CREDAI on Monday.
According to the official data from the MSME Ministry, 2.21 crore MSMEs are registered (excluding registrations via the Udyam Assist Portal) under the ministry, as of January 8, of which 38.09 lakh with a 17.2 per cent share were from Maharashtra followed by 22.32 lakh with a 10 per cent share from Tamil Nadu and 20.95 lakh with a 9.4 per cent share from Uttar Pradesh.
Rajasthan with 16 lakh and Gujarat with 15.96 lakh MSMEs were the other top destinations for registered units in the country.
The policy initiatives that have supported the MSME ecosystem in Uttar Pradesh, according to the report, were 50 per cent interest subsidy for micro units capped at Rs 25 lakh, approved projects with 10 acres or more eligible for annual infrastructure interest subsidy of up to 50 per cent capped at Rs 2 crore annually and 100 per cent stamp duty exemption in select regions other than women entrepreneurs and MSME industrial park developers.
Emphasizing the role played by the Udyam scheme, the report said “Several cities in Uttar Pradesh have emerged as MSME clusters, with Agra, Kanpur, Varanasi, Lucknow, Meerut and Ghaziabad leading in enrolling for the Udyam scheme.”
“In addition, by holding a significant position in the microsegment and establishing a robust presence in rural areas, the MSME sector is strategically positioning itself to meet the demands of rural markets and cater to low-income consumers. This strategic alignment positions the sector as a central force in alleviating regional disparities and promoting a more equitable income distribution,” it said.
Sector-wise, the report highlighted that the construction sector, contributing approximately 8 per cent to the GDP, is a strategic opportunity for Indian MSMEs.
“With the construction sector poised to become the third largest globally in the next three years, unorganized firms in this domain are expected to derive significant benefits by registering under the MSME ambit. The integration of digitization, traditional banking systems, and open protocols has created a more inclusive financing ecosystem, dismantling barriers for a broader segment of MSMEs,” the report said.
Anshuman Magazine, Chairman, India, Southeast Asia, Middle East & Africa, CBRE, said, “As the MSME sector continues to play a pivotal role in shaping India’s economic tapestry, Uttar Pradesh’s emergence as a powerhouse reaffirms its significance in driving growth and reducing regional imbalances. The transformative shift in MSME financing, fuelled by technology and collaborative partnerships, is dismantling barriers and fostering a resilient, innovative entrepreneurial landscape.”
CBRE, however, called for addressing existing challenges and also proactively fostering an ecosystem that encourages innovation and creativity to nurture MSMEs.
“Collaborative efforts between the government, industry stakeholders, and financial institutions can help create a robust support system, ensuring that the MSMEs receive the necessary resources and guidance to navigate the evolving economic landscape,” the report noted.