Reserve Bank of India Governor Sanjay Malhotra has reiterated the central bank’s commitment to supporting the Micro, Small and Medium Enterprises (MSME) sector, describing it as India’s “entrepreneurship nursery” and a critical pillar of the country’s economic growth.
Speaking to the media, Malhotra said MSMEs play a vital role in generating income, creating jobs and nurturing entrepreneurship across the country.
“MSMEs are very vital, important for any economy and that is true even for India. They provide not only a lot of income but also lot of employment. It’s also the nursery for entrepreneurship,” he said.
The RBI Governor’s remarks came as the central bank observes a dedicated awareness week focused on MSME-related schemes and regulatory initiatives aimed at strengthening the sector.
“We are celebrating, RBI is celebrating this week for spreading awareness about MSME schemes and the measures that we have taken,” Malhotra added.
MSMEs continue to be one of the most significant contributors to India’s economy. According to government data, the sector contributes around 31.1 percent of India’s Gross Domestic Product (GDP) and accounts for 48.58 percent of the country’s total exports.
The sector comprises more than 7.47 crore enterprises operating across manufacturing, trade and services.
MSMEs also contribute approximately 35.4 percent of India’s manufacturing output and support the livelihoods of nearly 32.8 crore people, making them the country’s second-largest source of employment after agriculture.
Highlighting the RBI’s long-standing focus on the sector, Malhotra noted that the central bank has introduced several measures over the years to improve access to finance for small businesses.
“Over the last many decades, RBI has been promoting the development of MSMEs,” he said.
“A number of schemes, number of measures have been taken by RBI to improve the flow of credit to MSMEs.”
Recent policy efforts have also focused on bringing informal enterprises into the formal economy.
Government data shows that more than 7.9 crore MSMEs and informal micro-enterprises had registered through the Udyam and Udyam Assist platforms as of March 2026.
The formalisation drive has been supported by digital platforms such as GeM, TReDS and SAMADHAAN, which provide small businesses with improved market access, quicker payment mechanisms and stronger dispute-resolution frameworks.
Malhotra said the RBI would continue to strengthen support for the sector in the years ahead.
“And we will continue in the coming days and years to support this very important sector for us,” he said.
With MSMEs accounting for nearly half of India’s exports and serving as a major source of employment, policymakers increasingly view the sector as central to achieving higher economic growth, broader financial inclusion and a stronger entrepreneurial ecosystem.
