Reserve Bank of India (RBI) Governor Sanjay Malhotra on Sunday described Micro, Small and Medium Enterprises (MSMEs) as India's 'entrepreneurship nursery' and affirmed that the central bank will continue to extend strong support to the sector. Speaking to the media in Kochi, Malhotra underscored the vital role of MSMEs in fostering entrepreneurship, generating substantial employment, and contributing significantly to income creation.
MSMEs: A Pillar of the Indian Economy
According to government data, MSMEs contribute approximately 31.1% to India's Gross Domestic Product (GDP) and account for 48.58% of total exports. The sector encompasses over 7.47 crore enterprises across manufacturing, trade, and services. It generates 35.4% of manufacturing output and supports the livelihoods of around 32.8 crore people, making it the second-largest employment source after agriculture.
Governor Malhotra noted, 'MSMEs are very vital, important for any economy and that is true even for India. They provide not only a lot of income but also a lot of employment. It's also the nursery for entrepreneurship.'
RBI's Ongoing Support and Awareness Initiatives
The RBI is currently observing a dedicated week to spread awareness about various MSME schemes and regulatory measures implemented to boost the sector. Malhotra stated, 'We are celebrating, RBI is celebrating this week for spreading awareness about MSME schemes and the measures that we have taken.'
He added, 'Over the last many decades, RBI has been promoting the development of MSMEs. A number of schemes, a number of measures have been taken by RBI to improve the flow of credit to MSMEs.'
Formalisation and Digital Platforms
Recent policy interventions have focused heavily on transitioning informal businesses into the formal economy. As of March 2026, over 7.9 crore MSMEs and informal micro-enterprises have registered through the Udyam and Udyam Assist platforms. This formalisation drive is paired with digital platforms like GeM, TReDS, and SAMADHAAN, which provide smaller businesses with better market access, legal safeguards, and faster dispute resolution for payments.
Governor Malhotra concluded, 'And we will continue in the coming days and years to support this very important sector for us.'
