The micro, small and medium enterprises (MSME) sector plays an important role in the economic growth of India. The sector offers a great contribution to the manufacturing output, employment, and exports of the country. It was estimated that the MSMEs contribute for 45% of the manufacturing output and 40% of the exports of the country.
It was estimated that through the fiscal year of 2009-2010, in over 26 million units throughout the country, about 59 million people were employed in the MSME sector. The highest growth rate was observed in the MSME sector than that of the industrial sector. The MSMEs in India are involved in manufacture of about 6000 products that range from traditional goods to high-tech items. The contribution of goods in MSME sector includes 22% from food products, 12% from chemical products, 10% from basic metal industry, 8% from metal products, 6% from electrical machinery parts, 6% from rubber plastic products, and 36% from other products.
Maximum opportunities are provided by the MSME sector for both self-employment and jobs after agriculture sector. According to the 4th Census with reference year 2006-07, employment to about 595 lakh persons was given by about 261 lakh enterprises. During the fiscal year of 2008-09, employment was given for about 659 lakh persons by 285 lakh enterprises. The percentage growth rate of the number of MSMEs from 2008 to 2009 was found to be 4.53. An increase in employment growth rate of 5.35% was observed in 2009 compared to the previous year. There has still been a rise in the development of MSME sector in India.