Convergence: The Catalyst for Entrepreneurship and Growth

In the Red Fort Declaration of 2025, the Prime Minister of India reaffirmed the Government’s commitment to building a Viksit Bharat by 2047, articulating entrepreneurship as a prime driver of this transformation. Entrepreneurial ventures have immense potential in steering India into a prosperous, powerful and Viksit nation. To ensure equity, efficiency and effectiveness of the rapidly evolving and expanding entrepreneurial ecosystem in the country, resources need to be prudently used, encouraging mergers wherever possible. 

Enterprises in India are termed as micro, small, medium and large, based on how much they invest in their plants and machinery, and how large their turnover is. The minutest within the micro category are sometimes termed as nano. In the recent past, there has been a proliferation of registration among micro, small and medium enterprises (MSME). 

Since 2023-24, more than 5.1 crore enterprises have come forth to get themselves registered as an MSME (Graph), taking the total number of registered MSMEs to 6.7 crore. Within registered enterprises, there is a preponderance of nano enterprises, with as many as 2.8 crore having registered in the past two years. Their briskly growing numbers underscore the verity of impact which massive outreach drives can have. Further, the large numbers acknowledge that the demand for registration has increased because registration creates entitlements for the enterprises, which they are now beginning to become aware of.

Graph: No. of Registered Enterprises | Source: udyamregistration.gov.in

Convergence is the key to stimulating enterprises to tap their full potential. This is essential considering the three-fold perceptible heterogeneity which exists in the dynamic Indian entrepreneurial environment. Its multiplicity is palpable in the myriad of sectors it covers, the variegation of its constituents in terms of their structure and the immense geographical spread which it spans.

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Firstly, the entrepreneurial ecosystem is a microcosm of the Indian economy, stretching across textiles, food, hospitality, transport and many more sub-sectors. Many line Ministries like Ministries of Textiles, Food Processing Industries, Tourism, etc., dealing with specific sectors are involved in ensuring that benefits reach the intended beneficiaries. Additionally, based on their functions, some other Ministries/Departments too reach out to beneficiaries across sectors. 

Enhancing the skilling of entrepreneurs is done by Skill Development and Entrepreneurship, Labour and Employment, Rural Development (MoRD) and Micro, Small and Medium Enterprises (MoMSME). Focussed credit interventions of the Ministry of Housing and Urban Affairs extend loans in three tranches, with the third tranche being up to Rs. 50,000 to smaller enterprises under SVANidhi.

Department of Commerce provides financial support to entrepreneurs to access overseas markets. In addition to MoMSME’s CHAMPIONS Scheme, the scheme for Startups Intellectual Property Protection, implemented by Department for Promotion of Industry and Internal Trade facilitates the protection of Patents, Trademarks and Designs of innovative and interested startups. 

Besides, incubation schemes fostering innovation and entrepreneurship are managed by NITI Aayog’s Atal Innovation Mission, MeitY’s Technology Incubation and Development of Entrepreneurs, Department of Science and Technology’s ‘Nidhi Initiative’, etc. Benefits of cluster-based schemes to provide common infrastructure to local entrepreneurs get amplified by reaping economies of scale. 

Secondly, the structure of enterprises depicts a rich variety, ranging from proprietorship to Hindu Undivided Family, partnership to cooperatives, private and public limited companies to limited liability partnerships, and even societies, trust and Self-Help Groups. In addition to The Micro, Small and Medium Enterprise Development (MSMED) Act 2006, depending on the form of the enterprise, it may be governed by different acts e.g. Companies Act 2013, Cooperative Societies Act, 1912, etc. 

Also read: MSMEs to Power Half of India’s GDP, 60% of Exports, Employ 150 Million by 2030: Report

A self-help group, typically a group of 20 entrepreneurs, is an example of an enterprise which may enjoy a micro enterprise status of MoMSME’s Udyam Registration Portal (URP), while being covered under MoRD’s National Rural Livelihood Mission. There are 4 lakh such enterprises. The remaining 80 lakh plus enterprises on NRLM can also benefit from complementing benefits by onboarding on URP. 

Through a concerted endeavour, MoMSME is linking Central Ministries, State Government Departments and other agencies related to entrepreneurship to magnify the gains for beneficiaries. Two pertinent examples can be referred to here. Firstly, connecting of URP with 4 dozen portals, and secondly, joining the PM Vishwakarma portal with databases of all stakeholders who are involved in extending benefits are not only examples of steps taken to facilitate the ease of doing business and enhancing transparency, but these also elucidate the steps taken for aiding the smooth transfer of both data and benefits among stakeholders. 

Thirdly, the geographical spread of enterprises across the country is vast. Enterprises, being a part of ‘Industry’, are de facto in the State List. States have one or more Micro and Small Enterprise Facilitation Councils which act as quasi-judicial bodies under The MSMED Act to consider cases of payments which are due to Micro and Smaller Enterprises for more than 45 days. States like Andhra Pradesh, Haryana, Madhya Pradesh, Uttar Pradesh, etc. have their own policies for promoting MSMEs. Respective public procurement policies of States like Jharkhand, Maharashtra, Meghalaya Odisha, Tamil Nadu, etc. have the objective of ensuring a steady, assured market for smaller enterprises.

Convergence as a compelling catalyst of entrepreneurship and constructive growth is discernible. It eschews duplication of effort, and is factitive in having a multiplier effect on benefits extended.

Dr Ishita G Tripathy & Nitisha Mann are officers of the Indian Economic Service.