Around 30-40% of Micro, Small, and Medium Enterprises (MSMEs) across manufacturing, services, and trading sectors plan to increase their workforce in the next quarter. This insight comes from the Small Industries Development Bank of India (SIDBI), which released its first MSME Outlook Survey on Wednesday. The quarterly report analyzed business sentiment for October-December 2024 and found that employment levels remained steady during this period.
“The expectations on the future, however, are bullish,” the report highlighted, noting that workforce expansion plans were strongest in the manufacturing sector, while the trading sector showed more moderate optimism.
Business Confidence and Growth Outlook
The SIDBI survey, conducted with a sample size of 1,200 MSMEs across India, also reported positive business performance for the quarter ending in December. MSMEs in the manufacturing sector recorded the highest confidence levels, with the MSME-Business Conditions Index (M-BCI) reaching 60.33, closely followed by the services sector at 59.67.
The MSME-Business Expectations Index (M-BEI) projects sustained optimism over the next four quarters, with indices exceeding 60 across key parameters. Manufacturing MSMEs, in particular, are projected to surpass 70 on metrics such as sales growth, profitability, and skilled labour availability.
MSMEs expressed confidence in sales growth, driven by improvements in order books, production, and selling prices. The report also emphasized that government support has boosted sentiment, with the sector identified as one of the four key growth engines of the economy in the Union Budget.
Investments in Technology and Environmental Measures
The SIDBI survey noted that 46% of manufacturing MSMEs showed a willingness to invest in environmental protection measures and technology adoption. However, challenges persist in labour productivity and skilled labour availability, with one-sixth of respondents expressing dissatisfaction in these areas.
Union Budget Measures for MSMEs
The Union Budget for FY26 introduced several initiatives to support MSMEs in scaling operations and improving resource access. Key measures include:
- Investment and turnover limits for MSME classification were increased by 2.5 times and 2 times, respectively.
- The credit guarantee cover for micro and small enterprises was raised from Rs 5 crore to Rs 10 crore, enabling an additional credit flow of Rs 1.5 lakh crore over five years.
- A new customised credit card scheme will offer Rs 5 lakh in credit to micro enterprises registered on the Udyam portal.
Additionally, a Focus Product Scheme was introduced for the footwear and leather sector, aiming to support design, component manufacturing, and non-leather production. This initiative is expected to create 22 lakh jobs and generate a turnover of Rs 4 lakh crore.
The government’s continued emphasis on MSMEs highlights the sector’s pivotal role in driving economic growth, technological advancement, and employment generation across India.