In May 2025, the National Institution for Transforming India (NITI) Aayog released a report titled “Designing a Policy for Medium Enterprises”. It was launched by Shri Suman Bery, Vice Chairman, NITI Aayog.
- It offers a comprehensive roadmap for transforming medium enterprises into future growth engines of India’s economy.
- The report highlights the critical, yet underutilized role played by medium enterprises and outlines targeted interventions to unlock their full potential.
Key People:
The report was launched in the presence of Dr. V.K. Saraswat, Member, NITI Aayog and Dr. Arvind Virmani, Member, NITI Aayog.
India’s Micro Small Medium Enterprises (MSME) sector:
i.The MSME sector contributes approximately 29% to India’s Gross Domestic Product (GDP), accounts for 40% of exports, and employs over 60% of the workforce.
ii.Despite its critical role, the composition of the sector is disproportionately weighted:
- 97% of registered MSMEs are micro enterprises
- 2.7% are small
- Only 0.3% are medium enterprises
iii.But, this 0.3% of medium enterprises contributes nearly 40% of MSME exports, highlighting their immense untapped potential as scalable and innovation-driven businesses.
Key Challenges:
i.The report highlights the following key challenges faced by medium enterprises:
- Constrained access to tailored financial products
- Limited adoption of advanced technologies
- Inadequate Research and Development (R&D) support
- Lack of sectoral testing infrastructure
- A mismatch between training programmes and enterprise needs
Comprehensive Policy Framework:
To address these issues, the report outlines a comprehensive policy framework with targeted interventions across six priority areas:
i.Tailored Financial Solutions:
- A new working capital financing scheme tied to enterprise turnover has been introduced, along with a 5 crores credit card facility at market rates.
ii.Technology Integration and Industry 4.0:
- Existing Technology Centers will be upgraded into India SME 4.0 Competence Centers, tailored to specific sectors and regional needs.
iii.R&D Promotion Mechanism:
- A dedicated R&D cell will be set up within the Ministry of MSME to support cluster-based projects of national importance, utilizing the Self-Reliant India (SRI) Fund.
iv.Cluster-Based Testing Infrastructure:
- Development of sector-focused testing and certification facilities to ease compliance and enhance product quality.
v.Custom Skill Development:
- Alignment of skilling programmes with enterprise-specific needs by region and sector, and integration of medium enterprise-centric modules into existing Entrepreneurship and Skill Development Programmes (ESDP)
vi.Centralized Digital Portal:
- Creation of a dedicated sub-portal within the Udyam platform featuring scheme discovery tools, compliance support, and AI-based assistance to help enterprises navigate resources effectively.
Points to Note:
New Classification of the MSME Units as per Budget 2025-2026:
| Type | Classification on Investment | Classification on Turnover | ||
|---|---|---|---|---|
| Earlier – July 2020 | Revised – April 2025 | Earlier – July 2020 | Revised – April 2025 | |
| Micro | Rs 1cr | Rs 2.5cr | Rs 5cr | Rs 10cr |
| Small | Rs 10cr | Rs 25cr | Rs 50cr | Rs 100cr |
| Medium | Rs 50cr | Rs 125cr | Rs 250cr | Rs 500cr |
About the National Institution for Transforming India (NITI) Aayog:
Chief Executive Officer (CEO) – B.V.R. Subrahmanyam
Headquarters – New Delhi, Delhi
Established – 2015
