2023: A Year of Survival, Growth, and Expansion for Indian MSMEs

Survival, Growth, and Expansion for Indian MSMEs

For Indian micro, small, and medium-sized businesses, 2023 is expected to be a pivotal year (MSMEs). Having generated over 30% of the nation’s GDP and supporting over 110 million jobs, this industry has long been recognised as the foundation of the Indian economy. Despite the fact that the pandemic has had a significant negative impact on MSMEs, there is still a long way to go before they have fully recovered. The year 2023, however, may be the one in which Indian MSMEs survive, thrive, and expand if the proper support and regulations are in place.

This optimistic perspective is the result of several causes. One is the growing emphasis on MSMEs by the Indian government. MSME financing companies may prosper in a supportive environment thanks to programmes like the Atmanirbhar Bharat Abhiyan, which aims to make India robust and self-sufficient.

The shifting business environment brought on by the development of technology and digitization, which offers new chances for MSMEs to grow and innovate, is another important driver. MSMEs now have access to a larger client base and may more readily enter new markets both locally and internationally thanks to the expansion of e-commerce and digital platforms.

arth, a forum for policy, ideas, and analysis, is one company that has been at the forefront of assisting MSMEs. Arth has been attempting to create an atmosphere that is favourable for MSMEs to flourish in. With their numerous initiatives, they have been aiding MSMEs and promoting policies that promote the sector’s growth.

The government’s actions and encouraging measures, such tax reductions and financing availability, would improve the climate for MSMEs. Yet there are still obstacles to be addressed, such as the necessity to adjust to a corporate environment that is changing quickly. MSMEs’ future in 2023 and beyond will undoubtedly seem bright if they adopt emerging ideas and ask for assistance.

These are the key developments that are anticipated to have a significant impact on the MSME sector in 2023: digitalisation, the implementation of the MSME policy draught, and technical advancement.

The Digital Transition

When it comes to doing business, India’s MSMEs sector is quickly transitioning from an offline to an online form. As they provide prompt services to their clients and consumers, they are implementing technology to enhance their operations and boost efficiency.

This includes the application of blockchain technology, artificial intelligence, machine learning, and cloud computing. The start of this trend, which will assist MSMEs in expanding their client base, streamlining their operations, and lowering costs, is anticipated for 2023.

ECLGS Expiration

Unless an extension is granted, the Emergency Credit Line Guarantee Scheme, one of the government’s credit assistance programmes, will end in March 2023. Several extensions have already been made to the programme since it debuted in May 2020.

A new loan under the ECLGS was announced by the center in the budget for 2022–2023 and was extended through March 2023 for 130 lakh MSMEs. A Rs 6,000 crore grading system for MSMEs will be put into place over the next five years. The ECLGS guarantee cover has also increased by Rs 50,000 crore, bringing the total amount covered to Rs 5 lakh crore.

For Unregistered Vendors, e-Commerce Supply

Positively, Indian e-commerce vendors who provide products and services with a turnover of up to Rs 40 lakh and Rs 20 lakh, respectively, but who are not registered under the Central Goods and Services Tax (CGST) Act, would be eligible to make intra-state supplies starting on October 1, 2023.

Ecommerce has risen in popularity, particularly during and after the COVID-19 epidemic. This also covers vendors who are registered under the GST Composition scheme. MSMEs would benefit greatly in 2023 if they can successfully use online platforms to market and sell their goods and services.

Credit Increase of Up to 18% 

A research by the credit rating firm Crisil predicts that between FY 2023 and FY 2024, bank loans to MSMEs would expand by a respectable 16 to 18%.

The production linked incentive (PLI) plan would then likely be impacted by the MSME backer “Atma Nirbhar Bharat” project, maintaining credit demand. According to Crisil, the rise in MSME credit in FY 2023 and FY 2024 is projected to be larger than the 10 to 12% growth in credit to the corporate category predicted for those two fiscal years.

Simple Financial Availability 

In order to help MSMEs expand and become more competitive, major governments throughout the world are giving them support in the form of tax incentives, loans, and other types of aid, especially after the Covid-19 outbreak.

According to an analysis from 2022, just 16% of MSMEs in India receive formal loans, leaving the remaining 86% credit-starved. This increases the risk of credit fraud as many of these businesses rely on unofficial credit sources. Thus, India will place a lot of emphasis on having access to quick and safe financing in 2023.

The National MSME Policy

Indian MSMEs can anticipate some policy action in 2023 as a result of the government’s release of its draught national policy in February of last year, which included suggestions for comments on the measures promoting MSMEs’ competitiveness, technology upgrades, cluster and infrastructure development, MSME product procurement, and the availability of specialized credit support.

 arth’s Impact on Indian MSME

In this regard, arth, a top MSME fintech company, is ideally placed to promote the development and growth of Indian MSMEs throughout the course of the next year. arth provides a variety of cutting-edge financial services and solutions tailored exclusively for MSMEs, assisting them in gaining access to the funding they require to expand and succeed.

The utilization of cutting-edge technology by arth, which enables it to offer quick and effective access to funds, is one of its primary benefits. arth’s platform evaluates creditworthiness using cutting-edge data analytics and artificial intelligence, enabling it to take swift judgements and release cash quickly.

arth’s emphasis on individualized service and assistance is another significant benefit. Unlike conventional banks and financial institutions, arth collaborates closely with MSMEs to comprehend their particular needs and issues and offers solutions that are specialized to meet those needs.


Overall, the combination of arth’s technology-driven approach and its personalized service and support makes it an ideal partner for Indian MSMEs looking to grow and expand in 2023. By providing access to capital, expertise and resources, arth is helping to create a supportive environment for MSMEs to thrive, and to contribute to the growth and development of the Indian economy as a whole.