In its report titled ‘Designing a Policy for Medium Enterprises’, prepared by the Administrative Staff College of India, Hyderabad, released on Monday, the Aayog has proposed introduction of a working capital financing scheme linked to enterprise turnover for medium enterprises, a Rs 5 crore credit card facility at market rates and expedited fund disbursal mechanisms through retail banks to help medium enterprise expand and improve efficiency.
According to the report, the MSME sector contributes approximately 29% to India’s GDP, accounts for 40% of exports, and employs over 60% of the workforce. However, the composition of the sector is disproportionately weighted with 97% of registered MSMEs being micro enterprises, 2.7% are small, and only 0.3% are medium enterprises.
However, this 0.3% of medium enterprises contributes nearly 40% of MSME exports, it said, emphasizing on the need to help medium enterprises scale up, innovate and play a strategic role in India’s transition towards self-reliance and global industrial competitiveness under Viksit Bharat in 2047.
“Medium enterprises hold immense potential to shape India’s economic future. By equipping them with the right resources, policies and support systems, India can unlock a wave of innovation, industrial growth and economic dynamism,” Suman Bery, vice chairman, NITI Aayog said.
Calling for greater incentives for medium enterprises, the Aayog said that out of the 18 existing policies of the ministry of micro, small and medium enterprises only eight are available for medium enterprises, limiting their ability to scale up, innovate and improve efficiency. The report suggests establishing a dedicated research and development (R&D) cell within the ministry of micro, small and medium enterprises and allowing medium enterprises to leverage the Self-Reliant India Fund for taking up cluster-based projects of national significance.“Development of sector-focused testing and certification facilities are needed to ease compliance and enhance product quality,” it said.
Alignment of skilling programmes with enterprise-specific needs by region and sector, and creation of a dedicated sub-portal within the Udyam platform featuring scheme discovery tools, compliance support, and AI-based assistance will help enterprises on manpower requirements and navigate resources effectively, it added.
According to the report, medium enterprises in India face key challenges including constrained access to tailored financial products, limited adoption of advanced technologies, inadequate research and development (R&D) support, lack of sectoral testing infrastructure, and a mismatch between training programmes and enterprise needs.
“These limitations hinder their ability to scale and innovate,” it said.
