It recommends: “To address this, it is necessary to reform the credit-secured fund trusts for micro and small enterprises (CGTMSE) by strengthening regulatory oversight and further reducing the risk premium for borrowers seeking CGTMSE funds.”
The report further said Sidbi needs to play an important role in helping NBFC improve its capabilities and governance structure to expand operations.
In addition, it recommends lowering the eligibility barriers for programs targeting capital and interest on national-level loans to better meet MSME's financing needs throughout the life cycle.
MSME increased 30.1% of India's total value in 2020-21, while exports were 12.39 crore in 2024-25, with the number of export units of 1,73,350. The report highlights the “missing middle” issue and calls for a comprehensive policy framework that can help companies grow organically and scale economies of scale in production. In addition, it calls for simplification of the income tax process to promote a more equitable and effective policy framework to help MSME become a formal business.
According to the report, the human needs of MSME in India requires substantial investment in STEM (science, technology, engineering and mathematics) education.
“To meet the requirements of a rapidly growing job market, training programs must be aligned with current industry needs and provide last-mile connectivity, especially for micro-enterprises located in rural areas,” it said, adding that this is critical to addressing existing skills gaps by reforming formal vocational education and technical training.
“In order to expand and enhance existing training programs, it is necessary to have easy access to some countries of employment training and skills development programs, especially for MSMEs that face challenges due to their location or size,” it said.
It added: “MSME India needs to strengthen supply chain connectivity and provide additional requirements for affordable digital risk management solutions to track supply chains, monitor inventory and manage logistics in real time.”
According to the report, the ability to support the technological upgrades of micro and small businesses, meet their basic technical needs and increase their production capacity is necessary.
It added: “In addition, states should develop MSME-specific infrastructure, such as co-working spaces, industrial parks and shared facilities to enhance scale and competitiveness.”
