NewKerala.com

MSMEs to Drive 40% of India's GDP by 2030, Report Projects Massive Growth

A report from B2K Analytics forecasts that the contribution of Micro, Small, and Medium Enterprises (MSMEs) to India's GDP will rise to 40% by 2030 from the current 30%. It estimates a total funding requirement of Rs 162.92 trillion by that year, with a significant portion expected to be met through formal credit channels. The report emphasizes the critical need for formalization, as 95% of MSMEs operate informally, and advocates for digital payments and equity financing to bridge the credit gap. Maharashtra currently leads the nation with over 11 crore registered MSME units, driven by its industrial diversity and developed infrastructure.

Key Points: MSMEs to Contribute 40% of India's GDP by 2030: Report

  • MSME GDP share to hit 40% by 2030
  • Funding gap of ~Rs 55 trillion projected
  • Formalisation & digital payments key to growth
  • Maharashtra leads with over 11 crore MSMEs
2 min read

MSMEs likely to contribute up to 40 pc of GDP by 2030: Report

A new report projects India's MSME sector will contribute 40% to GDP by 2030, highlighting a massive funding requirement and the need for formal credit.

"Our projections reflect strong long-term growth trends in terms of expansion in MSMEs contribution to GDP. - Ritaban Basu"

New Delhi, April 4

The share of MSMEs in India's GDP will rise to 40 per cent by 2030, from about 30 per cent currently, a report said on Saturday.

The report from B2K Analytics said India's GDP is projected to reach Rs 537.96 trillion by 2030 if current growth trend continues, lifting the MSME sector's contribution to roughly 40 per cent, or about Rs 215.18 trillion.

The MSME sector's total funding requirement is estimated at Rs 162.92 trillion by 2030, the report added.

Out of the total funding requirement, formal credit availability is projected at Rs 78.02 trillion, comprising Rs 56.98 trillion from priority sector lending, Rs 18.57 trillion from scheduled commercial banks and Rs 2.46 trillion from NBFCs.

An additional 30 per cent of funding gap is expected to be met through promoters' own capital, while 5 per cent is expected to be met through informal sources, leaving an estimated unmet requirement of Rs 55.18 trillion by 2030.

"Our projections reflect strong long-term growth trends in terms of expansion in MSMEs contribution to GDP. Formal credit growth is also expected to move in tandem," said Ritaban Basu, CEO, B2K Analytics, said.

He called for expansion of formal financing channels to close the credit gap in the MSME space.

The report also suggested deepening credit penetration and developing innovative funding mechanisms to sustainably support MSME growth. It urged formalisation as a priority, as around 95 per cent of the MSMEs operate informally, making it difficult for lenders to assess their creditworthiness.

Filing GST returns could improve transparency of MSMEs around their business activity and financial performance, it suggested.

"Adopting digital payment systems such as UPI and online banking helps create a verifiable transaction history, enabling lenders to better evaluate financial health. These systems also improve cash flow management, giving MSMEs greater control over their finances while maintaining clear financial records," the firm said.

Digital payment systems also enhance credibility and increase access to priority sector lending and government schemes. It also recommended equity-based financing, such as SME IPOs on stock exchanges, which allow MSMEs to raise capital directly from the market.

As of February 2026, Maharashtra has the highest number of MSMEs in India with over 11 crore registered units. State's diversified industrial base, widespread urbanisation, and mature infrastructure, especially in economic hubs like Mumbai, Pune, and Nashik led to this huge lead.

- IANS

Share this article:

Reader Comments

R
Rajesh Q
A 40% contribution is ambitious but achievable. The real challenge is that Rs 55 lakh crore funding gap mentioned. Banks still ask for collateral my small packaging business doesn't have. Hope the "innovative funding mechanisms" materialize soon. SME IPOs sound interesting but seem far off for most of us.
A
Aman W
Maharashtra leading with 11 crore units is no surprise. The infrastructure in Mumbai-Pune belt is a big enabler. But I hope this growth spreads more evenly across all states. Bihar, UP, and the North-East have huge potential if they get similar support and connectivity.
S
Sarah B
Working with artisan MSMEs in Rajasthan, I see the digital divide firsthand. While UPI is great, many smaller units, especially in rural areas, still rely heavily on cash. The report is right about formalisation being a priority, but the transition support needs to be stronger and more accessible.
V
Vikram M
Good to see a concrete report. The numbers are staggering - Rs 215 lakh crore from MSMEs! This growth will create millions of jobs. The focus should now be on skill development and ease of doing business at the ground level. Less inspector raj, more support.
K
Kriti O
While the projection is positive, I have a respectful criticism. Reports often overlook the mental stress on MSME owners. My father ran a unit, and the constant pressure of compliance, payments, and credit access is immense. Growth targets must be matched with holistic entrepreneur well-being programs.

We welcome thoughtful discussions from our readers. Please keep comments respectful and on-topic.

Leave a Comment

Minimum 50 characters 0/50