Uttar Pradesh contributes 9% to India’s MSME sector, as revealed by CBRE’s report. Discover policy initiatives, regional concentration, and the transformative impact on the construction sector, positioning MSMEs as beacons of inclusive economic development.

Uttar Pradesh: A Key Player in India’s MSME Sector

CBRE South Asia’s latest report, ‘MSMEs: Unleashing the Engines of Economic Prosperity,’ spotlights Uttar Pradesh (UP) as a leading contributor, holding a substantial 9% share in India’s Micro, Small, and Medium Enterprises (MSME) sector.

State’s Remarkable Contribution

According to the report, UP has secured a position among the top three states influencing India’s MSME landscape, standing alongside Maharashtra and Tamil Nadu. Together, these states collectively account for nearly 40% of all registered MSMEs in the country, showcasing not only geographical diversity but also their significant role in shaping the sector.

Policy Initiatives Driving Growth

The report emphasizes UP’s strategic policy initiatives supporting the MSME ecosystem. Notable measures include a 50% interest subsidy for micro units, annual infrastructure interest subsidies for approved projects exceeding 10 acres, and a 100% stamp duty exemption in select regions. This exemption extends to women entrepreneurs and MSME industrial park developers.

Udyam Scheme’s Influence

Highlighting the pivotal role of the Udyam scheme, a government initiative fostering MSME growth, the report underscores its impact in cities like Agra, Kanpur, Varanasi, Lucknow, Meerut, and Ghaziabad, which have emerged as MSME clusters.

MSMEs Shaping Rural Markets

The report observes UP’s MSME sector strategically positioning itself in the microsegment and rural areas, catering to low-income consumers. This strategic alignment aims to address rural market demands, reduce regional disparities, and promote equitable income distribution.

Construction Sector Opportunities

With the construction sector contributing approximately 8% to the GDP, the report identifies it as a strategic opportunity for Indian MSMEs. Unorganized firms in this sector, expected to become the third-largest globally in the next three years, stand to benefit significantly by registering under the MSME ambit.

Digital Transformation Driving Inclusivity

The integration of digitization, traditional banking systems, and open protocols has revolutionized the MSME financing landscape, breaking barriers for a broader segment of MSMEs. Collaboration between traditional banks and fintech firms plays a pivotal role in this transformative journey, combining banking expertise with fintech agility and data-driven capabilities.

Industry Leaders’ Perspectives

Anshuman Magazine, Chairman, India, Southeast Asia, Middle East & Africa, CBRE, emphasizes UP’s emergence as a powerhouse in the MSME sector, driving growth and reducing regional imbalances. Boman Irani, CMD, Rustomjee Group, National President, CREDAI, acknowledges the state’s role as a key contributor, underscoring its potential as a catalyst for economic growth and job creation.

Nurturing Growth and Innovation

The report concludes by highlighting the importance of nurturing the MSME sector. Initiatives focusing on skill development, technology adoption, and streamlined regulatory procedures are crucial for sustained growth. Collaborative efforts between the government, industry stakeholders, and financial institutions are essential to create a robust support system for MSMEs, ensuring they receive the necessary resources and guidance to navigate the evolving economic landscape.

By recognizing the MSME sector’s dynamic role in economic progress and implementing measures to bolster its growth, the report envisions a more robust, inclusive, and resilient economic future for India.

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