MSMEs in Maharashtra Transforming the Economic Landscape of The State

August 28, 2023
Updated on

Maharashtra, a state in the western region of India, is the second-most populous state in the country with a population of over 120 million people. The state capital of Maharashtra is Mumbai which is also the financial capital of India.

Maharashtra has a rich cultural heritage and is known for its historical sites, art, literature, and cuisine. The state is also home to several prominent universities and institutes of higher education, including the University of Mumbai, the Indian Institute of Technology Bombay, and the Tata Institute of Fundamental Research.

The economy of Maharashtra is diverse and includes industries such as manufacturing, finance, and services. The state is also a major producer of sugarcane, cotton, and fruits such as mangoes and grapes. Micro, Small and Medium Enterprises (MSMEs) are the backbone of the Indian economy. Maharashtra is one of the leading states in India with a strong MSME sector. They play a vital role in generating employment, promoting entrepreneurship, contributing to local economies and the country’s GDP.

According to the Ministry of MSMEs, Maharashtra has the highest number of MSMEs in India. The state’s MSME sector employs 24% of the total workforce in the state. The state contributes around 13% of the total MSME output in India. In this article, we will take a closer look at the MSMEs in Maharashtra.

Overview of MSMEs in Maharashtra

According to estimates, the micro sector in India encompasses 630.52 lakh businesses, making up more than 99% of all MSMEs. The small sector is estimated to possess 3.31 lakh MSMEs, while the medium sector is estimated to have 0.05 lakh MSMEs, making up 0.52 % and 0.01 % of the entire assumed MSMEs, respectively.

Of the approximated 633.88 MSMEs, 51.25 % can be found in rural areas whereas 48.75 % are situated in urban territories. 74.05 % of all MSMEs in the nation are concentrated in the top ten states. There are estimated 47.78 lakh MSMEs in Maharashtra, accounting for 8% of the MSMEs across India. Of these, 47.60 lakh are micro firms with 0.17 lakh being small enterprises.

Udyam registration is a government registration process for MSMEs in the country, is a new online registration process that replaced the previous system of MSME registration known as Udyog Aadhaar registration.

It is mandatory for all MSMEs to register with Udyam so as to avail of various benefits offered by the government, such as access to credit, subsidies, and schemes. The registration process is entirely online, and the applicant needs to provide basic information about the business, such as the name, address, type of business, and other details.

When it comes to Udyam registration, MSMEs in Maharashtra come in first place with close to 3.8 lakh enrollments. It is important to note that the service sector MSMEs have a larger portion of Udyam Registration than those in the manufacturing industry. MSMEs in Maharashtra play a significant role in shaping the economy, culture, and society of the state. Here’s how:


MSMEs in Maharashtra are the backbone of the state’s economy, contributing significantly to its growth and development. According to FY21 annual report citing the NSS 73rd round survey, there are around 4 million MSMEs in Maharashtra, employing over 10 million people. These businesses operate across a wide range of sectors, including manufacturing, agriculture, services, and handicrafts. The state government has implemented several policies and schemes to support MSMEs, such as providing financial assistance, training, and marketing support.


MSMEs in Maharashtra also play an important role in preserving the state’s rich cultural heritage. Many traditional art forms, crafts, and textiles are produced by MSMEs, such as Warli paintings and Paithani sarees. These products not only contribute to the state’s economy but also help to promote its cultural identity and heritage.

Paithani sarees in Maharashtra are a legacy, Yeola is the leading producer of this beautiful craft, with over 6,500 looms functioning in the taluka. These exquisite sarees can range in price from Rs 7,000 to in excess of Rs 20 lakh.


MSMEs in Maharashtra also benefit from the state’s well-developed transportation network. Many MSMEs rely on highways, ports, and airports to transport their products to various parts of the country and the world. The state’s strong transportation infrastructure enables MSMEs to expand their businesses and reach new markets.


MSMEs in Maharashtra also play a vital role in providing employment opportunities to the state’s educated youth. Many MSMEs operate in the technology and services sectors, providing jobs to skilled professionals from the state’s reputed universities and colleges. The state government has also implemented several policies and programs to encourage entrepreneurship and startup culture among students.


MSMEs in Maharashtra also contribute to the state’s vibrant festival culture. Many MSMEs produce and sell products related to festivals such as Ganesh Chaturthi and Diwali, generating significant revenues during these periods. MSMEs also play a role in providing employment opportunities during festival seasons, hiring temporary workers to meet the increased demand for their products.

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Industries in Maharashtra

Maharashtra is one of the most industrialized states in India, with a diverse range of industries. The state is home to many MSMEs, including manufacturing, services, and agriculture-based industries. Here are some of the key industries owned by MSMEs in Maharashtra:


Maharashtra is known for its manufacturing industries, including textiles, pharmaceuticals, chemicals, automobiles, and engineering. Maharashtra contributes around 25% of India’s total manufacturing output, making it the largest manufacturing state in India. The state has over 4,200 large and medium-scale factories and more than 4 million workers employed in the manufacturing sector. There are 225 spinning and composite textile mills in the State, with a total installed capacity of 48.82 lakh spindles and 43,863 rotors. Some of the major industrial centres in Maharashtra are Mumbai, Pune, Nashik, Aurangabad, and Nagpur.


The service sector in Maharashtra includes banking and financial services, insurance, transport, communication, information technology and business process outsourcing, real estate, hotels and tourism, healthcare, retail and wholesale trade, and education. Mumbai is the financial capital of India and is home to the Reserve Bank of India and the Bombay Stock Exchange. The state also has a growing IT industry, with many software companies based in cities like Pune and Nagpur.

Agriculture-based industries

Maharashtra is a major producer of agricultural products and has a range of industries that process and manufacture agricultural products. These industries include sugar, wine, and food processing. Maharashtra has around 60% of its cultivable land utilized for food grain crops. The state is the leading producer of Jowar and Arhar, contributing 46.09% and 29.11% respectively to the national production. It is the second most prolific producer of Cotton (22.21%), Soybean (28.14%), and all cereals (13.56%) in India.


Maharashtra is a major producer of electricity, with several large thermal power plants located in the state. The state is also home to the Mumbai High oil and gas fields, which produce a significant portion of India’s oil and gas.


Maharashtra is a major centre for the automotive industry in India, with many global automotive manufacturers having production facilities in Pune, Mumbai, Nashik and Aurangabad. The state has about 10.5% workforce skilled in engineering and manufacturing, which has helped attract investment from automotive companies. Some of the major automotive companies with production facilities in Maharashtra include Tata Motors, Bajaj Auto, Mahindra & Mahindra, and Mercedes-Benz.


Maharashtra is a major hub for the pharmaceutical industry in India, with many pharmaceutical companies having their headquarters or manufacturing facilities in the state. The state is home to the Mumbai-based Indian Pharmaceutical Association and the Maharashtra Food and Drug Administration. Some of the major pharmaceutical companies in Maharashtra include Sun Pharma, Lupin, Cipla, and Glenmark.


Maharashtra is one of the largest producers of chemicals in India, with a large number of chemical manufacturing companies operating in the state. The state is home to the Mumbai-based Indian Chemical Council and the Thane-Belapur Chemicals Zone, which is one of the largest chemical industrial estates in the country. Some of the major chemical companies in Maharashtra include Tata Chemicals, Reliance Industries, and BASF India.


Maharashtra has a large construction industry, with many large-scale infrastructure projects and real estate developments being carried out in the state. During the period 2011/12 to 2016/17, the construction industry experienced an average annual growth rate of 1.2%.

Overall, Maharashtra is a key industrial state in India, with a diverse range of industries that contribute significantly to the state’s economy. The state’s strategic location, skilled workforce, and strong infrastructure have helped it attract investment from both domestic and international companies.

Challenges Faced by MSMEs in Maharashtra

Despite the significant contributions of the MSMEs in Maharashtra’s economy, they face several challenges, that impact their growth and development. Here are some of the key challenges faced by MSMEs in Maharashtra:

Lack of access to finance

One of the major challenges faced by MSMEs in Maharashtra is the lack of access to finance. MSMEs often face difficulty in obtaining loans and credit from banks and financial institutions due to their limited financial resources and lack of collateral.

Limited market access

MSMEs in Maharashtra often have limited access to markets, both domestic and international, due to their small scale of operations and lack of resources to invest in marketing and distribution channels.

Lack of skilled manpower

MSMEs in Maharashtra also face a shortage of skilled manpower, which hinders their growth and innovation. This is due to the limited availability of skilled workers and a mismatch between the skills required by MSMEs and the skills possessed by the workforce.

The survey by the Federation of Indian Chambers of Commerce and Industry (FICCI) indicates that a major challenge faced by the industry is the availability of skilled labour. This is mainly due to the mismatch between the skills required by the industry and the skills available among the workforce.

The survey also found that the industry is facing difficulty in getting the right kind of talent and matching the skill sets to its requirements. The survey suggested that there is a need for the industry to develop skill gaps and map the requirements of the industry with the skills available in the market. It also suggested that the industry should focus on upskilling and reskilling the existing workforce to meet the changing demands.

Regulatory compliance

MSMEs in Maharashtra also face challenges related to regulatory compliance, such as complex and time-consuming procedures for obtaining licenses and permits, and the need to comply with multiple laws and regulations.

Competition from large-scale industries

MSMEs in Maharashtra also face stiff competition from large-scale industries, which often have more resources and greater bargaining power. This makes it difficult for MSMEs to compete on price and quality.

Policies and Schemes for MSMEs in Maharashtra

The state government has implemented several policies to support and promote the growth of MSMEs in Maharashtra, such as providing financial assistance, infrastructure development, and marketing support. Some of the significant policies and schemes are:

Stand Up India Scheme

The Stand-Up India scheme is a government initiative launched by the Government of India in 2016. It aims to promote entrepreneurship among women and people from marginalized communities, including Scheduled Castes (SC) and Scheduled Tribes (ST). The objective of the scheme is to provide loans between Rs. 10 lakh and Rs. 1 crore to at least one scheduled caste or scheduled tribe borrower and at least one woman borrower per bank branch for setting up a greenfield enterprise in manufacturing, services or trading sector.

Under this scheme, banks are required to provide loans to eligible borrowers within 30 days from the date of receipt of the loan application. The scheme also provides for a refinance window through the Small Industries Development Bank of India (SIDBI), to provide further support to the borrowers.

The Stand-Up India scheme also offers support to borrowers in the form of pre-loan training, marketing assistance, and post-loan follow-up through dedicated nodal officers. The scheme has been implemented across the country and has helped many individuals, especially women and those from marginalized communities, to set up their own businesses and become self-reliant.

Prime Minister Employment Generation Program (PMEGP)

The Prime Minister Employment Generation Programme (PMEGP) is a credit-linked subsidy scheme launched by the Government of India in 2008. The scheme aims to generate employment opportunities in rural as well as urban areas by promoting entrepreneurship among the youth and educated unemployed.

Under the PMEGP scheme, financial assistance is provided to set up new micro-enterprises and to expand existing ones. The scheme offers a subsidy of up to 35% of the project cost in urban areas and up to 50% of the project cost in rural areas. The remaining amount of the project cost is provided as a bank loan at a subsidized rate of interest.

The PMEGP scheme is implemented through the Khadi and Village Industries Commission (KVIC), the District Industries Centres (DICs), and the State Khadi and Village Industries Board (KVIBs). The beneficiaries can apply for the scheme online through the official website of KVIC or can approach the DICs or KVIBs for assistance.

Pradhan Mantri Mudra Yojana (PMMY)

The Pradhan Mantri MUDRA Yojana (PMMY) is a government initiative launched by the Government of India in 2015 to provide financial assistance to small businesses and entrepreneurs. The scheme aims to promote entrepreneurship and create employment opportunities by providing loans to non-corporate, non-farm small/micro-enterprises.

MUDRA stands for Micro Units Development and Refinance Agency. The scheme provides loans ranging from Rs. 50,000 to Rs. 10 lakh to micro and small businesses. The loans are provided through various financial institutions such as banks, microfinance institutions, and Non-Banking Financial Companies (NBFCs).

The loans provided under the PMMY scheme are classified into three categories – Shishu, Kishor, and Tarun – based on the amount of loan required by the beneficiary. The Shishu category provides loans up to Rs. 50,000, the Kishor category provides loans between Rs. 50,000 and Rs. 5 lakh, and the Tarun category provides loans between Rs. 5 lakh and Rs. 10 lakh.

The PMMY scheme has a collateral-free loan policy, which means that no collateral or security is required to avail of the loan. The scheme has helped several small businesses and entrepreneurs to start and expand their businesses and has contributed significantly to the economic growth of the country.

Seed Money Scheme (SMS)

The aim of this scheme is to motivate a person without a job to engage in industrial, service, or business activities by supplying them with soft loans to secure institutional finance.

Scope of the scheme:

The Seed Money Scheme has been amended in accordance with the Government of Maharashtra’s Regulation from the 18th of May, 2007.

  • The cost for industry, service and business activity has augmented to ₹ 25 lakhs, a hike from the one-time ₹ 10 lakhs.
  • Authorized lenders have agreed to supply 15% of the project cost in the form of seed money. Where the project costs up to ₹ 10 lakhs, SC/ST/OBC/NT/VT/Handicapped are eligible to receive 20% support.
  • A maximum of ₹ 3.75 lakhs is the maximum Seed Money amount allowed.
  • A bank loan covers 75% of the project cost.
  • For seed capital, the annual interest rate is 6%, and if the borrower pays back instalments within the specified time frame and on time, they are rewarded with a 3% rebate in interest.
  • If the instalment is not paid on time, a 1% penalty interest will be applied.

The repayment of the loan is to be started three years after it was taken out, with four payments due to be made on an annual basis. Nevertheless, when vehicles are concerned, the repayment starts six months after the loan is acquired. The scheme mainly encourages youth to pursue entrepreneurship, eventually expanding MSMEs in Maharashtra.

District Industries Centre (DIC) Loan Scheme

This scheme’s goal is to create job opportunities, including self-employment, for tiny companies in towns and rural areas that have a population of less than 100,000 and have invested less than ₹ 2 Lakhs in machinery and equipment. Such identifiable tiny units falling within the purview of the Small Scale Industries Board and Village Industries, handicrafts, handlooms, and silk & coir Industries, are eligible to receive financial assistance in the shape of margin/seed money under the Scheme.

For business people who are part of the general group, the most extreme margin money help is either 20% of their absolute venture or ₹ 40,000, whichever is the least. For those of booked rank and booked tribe, the Margin Money help is up to 30% of the absolute fixed capital speculation or close to a limit of ₹ 60,000, whichever is lower.

A 4% annual interest rate and a 1% penal interest rate in the event of failing to meet repayment requirements are attached to this loan. Payment of the margin money aid must be completed within eight years, starting with a two-year period of no payments. This plan is particularly advantageous for rural craftsmen.


The MSME sector is crucial for the growth and development of Maharashtra’s economy. The government of Maharashtra has launched several policies and schemes to promote and support MSMEs in Maharashtra. 

MSMEs in Maharashtra contribute largely to employment generation, exports, and overall economic growth. The state has a well-developed infrastructure, including industrial parks, and dedicated MSME clusters, which have provided a conducive environment for the growth of the sector.

The Maharashtra government has launched various schemes and incentives to promote entrepreneurship and support the MSME sector. The government has also simplified the procedures for setting up MSMEs in Maharashtra and has made it easier to obtain various licenses and clearances.

The state government has also taken initiatives to encourage MSMEs in Maharashtra to adopt green technologies and practices. These include providing financial incentives for the adoption of renewable energy sources and waste management technologies.

MSMEs in Maharashtra have immense growth potential, and the state government has taken several steps to support and promote the sector. The sector has contributed significantly to the overall economic development of the state and has provided employment opportunities to a large number of people. With the government’s continued support and the entrepreneurial spirit of the people, the MSME sector in Maharashtra is poised for further growth and success in the years to come.

Another significant development of MSMEs in Maharashtra is the increasing adoption of digital technologies. The government has launched various initiatives to promote the use of digital technologies among MSMEs, including providing subsidies for the adoption of digital technologies and creating online marketplaces to facilitate the sale of MSME products.

Though access to finance is a critical factor for the growth and sustainability of MSMEs in Maharashtra, the government has taken several steps to provide financial support to the MSME sector, including business loans and other forms of financing. These initiatives have helped MSMEs in Maharashtra to overcome the challenge of limited access to capital and to invest in their businesses

To provide for the fiscal requirements of the MSME sector, Kinara Capital, an RBI-registered NBFC, offers a range of financial services. With a presence across 4500+ pincodes in 6 states, Karnataka, Andhra Pradesh, Tamil Nadu, Telangana, Maharashtra, Gujarat and UT Pondicherry, Kinara Capital has issued more than 90,000+ Business Loans amounting to INR 5000+ crore to date.

MSMEs in Maharashtra can obtain fast loans from INR 1 lakh to INR 30 lakhs within 24-hours of application. The myKinara app on Google PlayStore assists in checking eligibility for the loan and provides the choice of 7 languages for the convenience of the applicant.

After successfully passing the eligibility examination and submitting the minimal required documents, the loan amount is transferred to the applicant’s bank account. For any queries, applicants may reach out to the customer service team by giving a missed call to 080-68264454.

Overall, the MSMEs in Maharashtra have a bright future, with a favourable policy environment, a strong infrastructure, and an entrepreneurial spirit among the people. The sector has the potential to contribute significantly to the state’s economic growth, employment generation, and exports. As the government continues to support and promote the sector, the MSMEs in Maharashtra will continue to thrive and contribute to the overall development of the state.

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