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As per CBRE South Asia Pvt. Ltd, report, Uttar Pradesh (UP) has emerged among the top three states in India as a significant contributor to India's Micro, Small, and Medium Enterprises (MSME) sector, with a 9% share in the MSME landscape in the country.
The report further highlights a regional concentration of MSME activity, with states such as Maharashtra, Tamil Nadu, and Uttar Pradesh collectively constituting a substantial portion of the country's MSME landscape. The three states account for nearly 40% of the total MSMEs registered in India. This emphasizes not only the diverse distribution of MSMEs across the nation but also the significance of these states in driving the overall vibrancy and economic impact of the sector. Following policy initiatives have supported the MSME ecosystem in Uttar Pradesh.
50% interest subsidy for micro units capped at INR 25 lakh. Approved projects with 10 acres or more eligible for annual infrastructure interest subsidy of up to 50%, capped at INR 2 crore annually.100% stamp duty exemption in select regions; also, women entrepreneurs and MSME industrial park developers
Additionally, the report emphasizes the pivotal role played by the Udyam scheme, a government initiative designed to promote and foster the growth of MSMEs, particularly in Uttar Pradesh. The report explores the significant shifts underway in India's MSME financing scene, driven by technological advancements and collaborative partnerships.
Several cities in Uttar Pradesh have emerged as MSME clusters, with Agra, Kanpur, Varanasi, Lucknow, Meerut and Ghaziabad leading in enrolling for the Udyam scheme. To further incentivize MSMEs, the Uttar Pradesh government has implemented a range of schemes. These strategic measures, complemented by the state's proactive incentives, have been instrumental in driving the expansion of India's MSME sector. In addition, by holding a significant position in the microsegment and establishing a robust presence in rural areas, the MSME sector is strategically positioning itself to meet the demands of rural markets and cater to low-income consumers. This strategic alignment positions the sector as a central force in alleviating regional disparities and promoting a more equitable income distribution.
Further, the report highlights the construction sector, contributing approximately 8% to the GDP, as a strategic opportunity for Indian MSMEs. With the construction sector poised to become the third largest globally in the next three years, unorganized firms in this domain are expected to derive significant benefits by registering under the MSME ambit. The integration of digitization, traditional banking systems, and open protocols has created a more inclusive financing ecosystem, dismantling barriers for a broader segment of MSMEs. The collaboration between traditional banks and fintech firms serves as a key driver of this transformative journey, combining banking expertise with fintech agility and data-driven capabilities.
