MSMEs are India's entrepreneurship nursery, RBI to continue strong support: Governor Malhotra
Kochi, June 22
Emphasising the Reserve Bank of India continued committment to the MSME sector, RBI Governor Sanjay Malhotra on Sunday described Micro, Small and Medium Enterprises as India's "entrepreneurship nursery" and said the central bank will continue to extend strong support to the segment.
He noted that MSMEs play a crucial role in the country's economy by fostering entrepreneurship, generating substantial employment, and contributing significantly to income creation.
Speaking to the media, he stated that the central bank is currently observing a dedicated week to spread awareness about various MSME schemes and the regulatory measures implemented to boost the sector.
"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 lot of employment. It's also the nursery for entrepreneurship. We are celebrating, RBI is celebrating this week for spreading awareness about MSME schemes and the measures that we have taken," Malhotra said.
The sector currently acts as a primary pillar of India's economic growth. Government data shows that MSMEs contribute roughly 31.1 per cent to the nation's Gross Domestic Product (GDP) and account for 48.58 per cent of total exports. The sector encompasses more than 7.47 crore enterprises across the manufacturing, trade, and services fields. It generates 35.4 per cent of manufacturing output and supports the livelihoods of approximately 32.8 crore people, making it the country's second-largest employment source after agriculture.
"Over the last many decades, RBI has been promoting the development of MSMEs," Governor Malhotra added. "A number of schemes, number of measures have been taken by RBI to improve the flow of credit to MSMEs."
To strengthen this ecosystem, recent policy interventions have focused heavily on transitioning informal businesses into the formal economy. According to govt data, 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.
"And we will continue in the coming days and years to support this [MSME] very important sector for us," Malhotra said.
— ANI
Reader Comments
As someone working with micro-enterprises in rural Karnataka, I can tell you that digital platforms like GeM and TReDS are game-changers—but only if MSME owners know how to use them. Awareness is still a huge gap. The RBI week is a good start, but we need more grassroots workshops in local languages, not just press releases from Mumbai. Still, kudos to Governor Malhotra for acknowledging the “nursery” of Indian entrepreneurship! 🌱
Good to hear the RBI is aware, but let’s be honest—MSMEs have been the backbone for decades while policymakers dragged their feet. The 31.1% GDP contribution is impressive, but what about the 32.8 crore people depending on this sector? Many are still trapped in informal setups with no social security. Formalisation is welcome, but don’t just celebrate numbers—ensure that the smallest vendors (chaiwallahs, tailors, repair shops) actually benefit without being crushed by compliance costs.
Interesting to see the RBI taking such a hands-on approach with MSMEs. In the US, the SBA does similar work, but the scale here is mind-boggling—7.47 crore enterprises and 48.58% of exports? That’s massive. I hope the awareness drive includes better dispute resolution, because payment delays kill small businesses faster than anything else. The SAMADHAAN platform sounds promising, but I’d love to see data on how many cases it’s actually resolved. 🇮🇳
Solid leadership from Governor Malhotra here. The “entrepreneurship nursery” analogy is spot on—every big Indian company today started as a small shop or workshop. But one respectful criticism: RBI’s focus should also include easing the tax burden on tiny enterprises. Many informal businesses stay out of the Udyam system because they’re scared of GST and income tax scrutiny. If the central bank truly wants formalisation, it needs to coordinate with the
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