Despite being key engines of employment and regional development, India’s Medium Enterprises are largely excluded from government support due to a lack of awareness and access. Only 10 per cent of Medium Enterprises have availed any of the 18 schemes offered by the Ministry of MSME, while 90 per cent remain unaware of online portals meant to ease access to these benefits.

This widespread disconnect extends to credit facilities, technological upgradation initiatives and skill development programmes—highlighting a critical gap in the government’s outreach and implementation mechanisms.

The latest NITI Aayog report titled ‘Designing a Policy for Medium Enterprises’ by Administrative Staff College of India (ASCI) with Principal Investigator Dr Karnak Roy and co-principal investigator Dr Sweety Pandey adds that a staggering 82 per cent of India’s Medium Enterprises in the survey operate without modern technologies like AI, IoT, or automation, severely limiting their productivity and global competitiveness. Despite flagship government initiatives promoting Industry 4.0, most enterprises remain cut off due to various reasons.

Despite the government’s loud proclamations about supporting schemes, the ground reality paints a grim picture—especially concerning, given that Medium Enterprises form the backbone of India’s industrial ecosystem. A total of 207 responses were received from beneficiaries for the survey. Insights were also gathered from Stakeholder Consultation Workshops.

Schemes on paper

The report highlights that a serious lack of awareness about government schemes is hampering Medium Enterprises from accessing much-needed support. Only 10 per cent of Medium Enterprises have availed any of the 18 schemes offered by the Ministry of MSME, including well-known initiatives like PMEGP, PM Vishwakarma, CGT-MSE, and RAMP. While basic awareness exists, most enterprises lack the detailed knowledge required to effectively navigate and benefit from these schemes.

Moreover, 90 per cent of Medium Enterprises reported not using any online portals designed to disseminate information about these government programs. A significant number are also unaware of credit facilities and special financial incentives available through banks—underscoring a major communication and outreach gap within the MSME support ecosystem.

Unskilled manpower

Survey findings reveal that a striking 88 per cent of Medium Enterprises are not utilising any government-sponsored skill development or training schemes.

Among those aware of such programmes, 31 per cent find them irrelevant to their specific business needs, while another 59 per cent rate them as only moderately relevant.

Stakeholder consultations further highlight the awareness gap, with 40 per cent of respondents unable to name even a single government scheme dedicated to skill development.

This is particularly concerning given the rising demand for a technologically skilled workforce. Yet, only 55 per cent of the current workforce is considered adequately skilled, with glaring shortages in critical technical areas such as automation, artificial intelligence, machine learning, and advanced manufacturing.

Medium Enterprises also voiced strong concerns about the broader ease of doing business. They called for improvements in fund disbursement mechanisms, simpler application processes, faster processing times, and overall better accessibility to government schemes and support systems.

Technological upgradation

A majority of Medium Enterprises continue to operate with outdated technology, making it difficult for them to stay competitive in a rapidly evolving global market. According to the survey, 82 per cent of Medium Enterprises have not integrated advanced technologies such as artificial intelligence, the Internet of Things, or other Industry 4.0 tools into their operations. Additionally, 60 per cent still rely on obsolete machinery, which negatively impacts both productivity and product quality.

Upgrading to modern technologies and training employees remains a significant challenge—particularly in the manufacturing sector, where investments are required in both physical infrastructure and digital systems. The lack of access to IT education further widens this technological divide.

Employment generation

The Micro, Small, and Medium Enterprises (MSME) sector is a cornerstone of India’s economy, contributing nearly 29 per cent to the national GDP, 40 per cent to total exports, and providing employment to over 60 per cent of the workforce. Among these, Medium Enterprises constitute a small fraction—just 0.3 per cent—with a total of 67,923 registered entities. Of these, 58 per cent (39,395 enterprises) are involved in manufacturing, while the remaining 42 per cent operate in the service sector.

Despite their smaller share in numbers, Medium Enterprises make a disproportionately large impact on employment, especially in tier-2 and tier-3 cities. They generate more jobs per unit than their Micro and Small counterparts, with each Medium Enterprise employing an average of 89.14 people—significantly higher than the 19.11 in Small Enterprises and 5.70 in Micro Enterprises.

Published on June 27, 2025