Government Policies and MSME Growth in India: Enhancing Entrepreneurship as a Growth Engine

Micro, Small, and Medium Enterprises (MSMEs) are significant to the India’s economic landscape, employment, development, innovation and economic status of the people. It contributing around 30% of the GDP & 45% of its export and providing employment to over 120 million people making it second largest employer of the nation. This research paper analyses the influence of various government policies on the growth and sustainability of MSMEs in India, focusing on how these policies stimulate entrepreneurship as a driver of economic development. The study emphasizes the importance of MSMEs in fostering innovation, regional development, and inclusive growth in India. It focus on key government initiatives e.g. the MSME Development Act of 2006, Prime Minister’s Employment Generation Programme (PMEGP), SFURTI, PM Vishvakarma etc. which aims to create a supportive regulatory environment for MSME growth, and the Pradhan Mantri Mudra Yojana (PMMY) which provides financial assistance to small businesses. The paper also examines the new initiatives designed to encourage innovation and entrepreneurship among young entrepreneurs with providing them the digital platform at their needed places. With thorough analysis of the policies, the study assess their effectiveness in addressing significant challenges faced by MSMEs, such as limited access to finance, complex regulatory frameworks, inadequate infrastructure, and restricted market access. The main objectives of the study are: - 1.To analyses the new definition of MSME. 2. To study the government initiatives in the field of MSME sector. 3. To examine the impact of digitalization on the MSME sector. The study concludes that government interventions have positively influenced the MSME sector. Continuous efforts are essential to overcome existing obstacles and fully realize the potential of MSMEs as a dynamic contributor to economic growth in India. By nurturing a robust ecosystem for entrepreneurship, India can ensure that MSMEs remain significant players in job creation, innovation, and overall economic resilience.