Maharashtra, Tamil Nadu, and Uttar Pradesh are top three states in MSME registrations: Report

Maharashtra, Tamil Nadu, and Uttar Pradesh have emerged as the top three states in MSME registration, accounting for 17%, 10%, and 9% respectively, according to report titled 'MSMEs: Unleashing the Engines of Economic Prosperity' by real estate firm CBRE South Asia Private Limited.

The Udyam registration portal, active since July 2020, has experienced significant uptake, relfecting the government's efforts to bolster MSMEs through diverse incentives, said the report. Certain states have shown a more pronounced push in this sector. The top ten states collectively encompass about 71% of the total MSMEs registered under Udyam.

The report underscores Uttar Pradesh's initiatives, including a 50% interest subsidy for micro units (capped at Rs 25 lakh), annual infrastructure interest subsidy for approved projects over 10 acres, 100% stamp duty exemption in specific regions, and incentives for women entrepreneurs and MSME industrial park developers.

Maharashtra and Tamil Nadu have also implemented policies such as industrial promotion subsidies, interest subsidies, electricity duty exemptions, and stamp duty waivers, fostering a conducive environment for MSME growth, said the report.

As India targets a $5-trillion economy by 2028, MSMEs are poised to play a pivotal role in driving economic expansion. Their growth hinges on accessible credit for operations and expansion, as well as digitisation across their functioning.

India's Foreign Trade Policy, enacted in March last year, aims to elevate overall exports to $2 trillion by 2030. The policy offers incentives such as reduced compliance costs, expedited clearance timelines, and credit insurance, bolstering the competitiveness of export-oriented MSMEs. This increased competitiveness is expected to reinforce India's manufacturing capabilities and export potential.

Domestically, MSMEs anticipate rising demand, driven by a burgeoning middle class and increased purchasing power. The anticipated growth in India's private consumption, projected to surpass $5 trillion by 2030 from $2 trillion in 2022, stands to benefit MSMEs significantly.

The report underscores that India's construction sector, constituting roughly 8% of the country's GDP, is on track to secure the position as the world's third-largest in the next couple of years. While numerous enterprises within construction and associated sectors are often categorised as unorganised, this scenario presents an opening for them to formalise their status by registering as MSMEs, added the report.