MSMEs: India’s Biggest GDP Contributor, Says FM Nirmala Sitharaman at IFQM Annual Symposium

New Delhi, September 18, 2025 – Finance Minister Nirmala Sitharaman on Thursday underscored the critical role of Micro, Small and Medium Enterprises (MSMEs) in India’s economic growth, describing the sector as the largest contributor to the country’s GDP.

Speaking at the annual symposium of the Indian Foundation for Quality Management (IFQM), Sitharaman said that India’s journey towards Viksit Bharat @2047 cannot rely solely on infrastructure creation but must also focus on quality management and upskilling of the workforce.

“India’s biggest contributor to the GDP is the MSME sector… Our path towards Viksit Bharat is not just going to be based on infrastructure or nominal improvements in training. It requires a seasoned approach to quality management and interventions across manufacturing and services,” the Finance Minister said.

Harnessing the Demographic Dividend

Sitharaman highlighted that while India holds the advantage of a young workforce, the challenge lies in ensuring industry-relevant skilling. She noted that without sustained efforts in workforce development, the country risks losing out on its demographic dividend.

“In every budget over the last two-three years, we have made provisions for skilling manpower. This is not limited to training courses but involves collaborations with institutions and authorities that have robust plans for skill development,” she said. She also pointed to the government’s initiative to transform Industrial Training Institutes (ITIs) into AI-driven centres of excellence.

MSME Clusters and Credit Access

On strengthening MSME clusters, the Finance Minister said that of the 235 clusters identified by the ministry, the Small Industries Development Bank of India (Sidbi) has a physical presence in around 150, ensuring direct credit access to enterprises.

“These clusters, with their specialised industries, not only train for their own manpower needs but also generate a skilled pool for the wider market. This model ensures that surplus trained workers are available for other industries as well,” Sitharaman explained.

Industry-Government Synergy

Calling for deeper collaboration between industry leaders and the government, she stressed that such partnerships are essential to drive improvements in productivity, services, and global competitiveness.

“With seasoned inputs from industrial leaders, these interventions can become a powerful catalyst for enhancing both the quality of goods and services in India,” Sitharaman said.

MSMEs at the Heart of Economic Ambitions

Her remarks at the IFQM symposium reinforced the government’s emphasis on MSMEs as central to India’s long-term growth vision. With targeted skilling initiatives, expanded credit access, and cluster-based development models, the sector is expected to play a pivotal role in achieving the economic goals set for 2047.