Context:

• On 26 May 2025, NITI Aayog released a detailed report titled "Designing a Policy for Medium Enterprises" in New Delhi.
• The report presents a comprehensive roadmap to position Medium Enterprises as the future growth engine of the Indian economy.
• This report emphasizes the central role of Medium Enterprises under the vision of Viksit Bharat@2047.
• The report was released by NITI Aayog Vice Chairperson Suman Bery in the presence of NITI Aayog Members Dr. V.K. Saraswat and Dr. Arvind Virmani.

Key Points:

• The report provides an in-depth discussion on structural disparities in the Micro, Small, and Medium Enterprises (MSME) sector, which contributes around 29% to India’s GDP, accounts for 40% of exports, and employs over 60% of the workforce.
• Despite its crucial role, the sector’s structure is disproportionately skewed: 97% of registered MSMEs are micro-enterprises, 2.7% are small enterprises, and only 0.3% are medium enterprises.

Importance of Medium Enterprises:

• The report states that medium enterprises, which constitute just 0.3% of MSMEs, contribute 40% of India’s MSME exports.
• These enterprises are vital to the Indian economy due to their role in job creation, innovation, and economic growth.

Proposed Reforms:

NITI Aayog has proposed six major reforms to empower medium enterprises:

Tailored Financial Solutions: Introduction of working capital financing scheme linked to enterprise turnover; Credit card facility of ₹5 crore at market rates and rapid fund disbursement mechanism via retail banks under MSME Ministry supervision.

Technology Integration and Industry 4.0: Upgradation of existing technology centers into India SME 4.0 Competency Centers that are sector-specific and regionally customized to promote adoption of Industry 4.0 solutions.

R&D Promotion Mechanism: Establishment of a dedicated R&D cell within the MSME Ministry, leveraging the Atmanirbhar Bharat Fund for cluster-based projects of national importance.

Cluster-Based Testing Infrastructure: Development of sector-centric testing and certification facilities to facilitate compliance and enhance product quality.

Custom Skill Development: Alignment of skill programs with enterprise-specific needs by sector and region, and integration of medium enterprise-focused modules into existing Entrepreneurship and Skill Development Programs (ESDP).

Centralized Digital Portal: Creation of a dedicated sub-portal within the Udyam platform featuring scheme discovery tools, compliance assistance, and AI-based support to help enterprises utilize resources effectively.

Part of Viksit Bharat@2047:

• This report is part of the broader vision of Viksit Bharat@2047, which focuses on strategic policies to make India a developed economy by 2047.

NITI Aayog:

Full Name: National Institution for Transforming India (NITI Aayog)

• Headquarters: New Delhi

Objectives:

✓ To formulate strategic policies and programs for India's development

✓ To promote cooperative federalism between the central and state governments

✓ To provide technical and strategic advice for policy implementation

✓ To support the achievement of Sustainable Development Goals (SDGs)

✓ To promote innovation, entrepreneurship, and technology

Structure:

• Chairperson: Prime Minister of India (currently Narendra Modi)
• Vice Chairperson: Executive head of NITI Aayog who leads policy formulation and implementation (currently Suman Bery)
• Members: Full-time and part-time experts from various sectors (e.g., Dr. V.K. Saraswat, Dr. Arvind Virmani)
• Chief Executive Officer (CEO): Manages day-to-day operations (currently B.V.R. Subrahmanyam)
• Governing Council: Includes Chief Ministers of all states, Lieutenant Governors of Union Territories, and senior Union Ministers

Key Functions:

• Viksit Bharat@2047: Strategic planning to make India a developed nation by 2047
• Providing suggestions for policy reforms such as MSMEs, digital transformation, and sustainable development
• Formulating policies in sectors like health, education, agriculture, and infrastructure
• Implementing development projects in collaboration with states
• Using digital tools and research for data-driven policymaking

Major Initiatives:

• Aspirational Districts Programme: For holistic development of underdeveloped districts
• Atal Innovation Mission: To promote innovation and startups
• •Digital India and Startup India: To boost digital transformation and entrepreneurship
• NITI Dialogue: Platform for policy discussion between Centre and States
• SDG India Index: Evaluation of progress by states and union territories on SDGs

Difference between NITI Aayog and Planning Commission:

• Approach: The Planning Commission focused on centralized planning, while NITI Aayog emphasizes cooperative and competitive federalism
• Flexibility: NITI Aayog provides more flexible and state-specific policy frameworks
• Role: NITI Aayog acts as an advisory and think tank, rather than merely approving plans

Micro, Small and Medium Enterprises (MSME):

• The Government of India has classified MSMEs based on investment and turnover.

Revised MSME Definition (effective from 1 April 2025):