RBI will continue to back MSMEs, India’s ‘Entrepreneurship Nursery’: Governor Sanjay Malhotra

RBI Governor Sanjay Malhotra on Monday described MSMEs as India’s “entrepreneurship nursery” and reaffirmed the central bank’s continued commitment to strengthening the Micro, Small and Medium Enterprises (MSME) sector through sustained policy support and development initiatives. 

Speaking to the media, Malhotra said MSMEs remain a critical pillar of the Indian economy, contributing significantly to employment generation, income creation, and entrepreneurial growth. “MSMEs are very vital and important for any economy, and that is true even for India. They provide not only a lot of income but also a lot of employment. It’s also the nursery for entrepreneurship,” he said. 

The governor said the RBI is currently observing a dedicated awareness week focused on promoting MSME-related schemes and highlighting regulatory initiatives introduced to strengthen the sector. “We are celebrating this week to spread awareness about MSME schemes and the measures that we have taken,” he added. 

Government data underlines the sector’s growing economic significance. MSMEs contribute around 31.1% to India’s Gross Domestic Product (GDP) and account for 48.58% of the country’s total exports. 

The sector comprises more than 7.47 crore enterprises across manufacturing, trade and services and contributes 35.4% of India’s manufacturing output. It also supports the livelihoods of nearly 32.8 crore people, making it the country’s second-largest source of employment after agriculture. 

Highlighting the RBI’s long-term role in supporting small businesses, Malhotra said the central bank has introduced several measures over the years to improve access to credit for MSMEs. 

“Over the last many decades, RBI has been promoting the development of MSMEs. A number of schemes and measures have been taken by RBI to improve the flow of credit to MSMEs,” he said. 

Recent policy interventions have increasingly focused on bringing informal businesses into the formal economy. 

According to government data, 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 push has also been supported through digital platforms such as GeM, TReDS, and SAMADHAAN, which aim to improve market access, strengthen legal protections and enable faster payment dispute resolution for smaller businesses. 

Reaffirming the commitment, Malhotra said RBI would continue to strengthen policy support for the sector in the years ahead. “We will continue in the coming days and years to support this very important sector for us,” he added.