India’s MSME growth is geographically concentrated, with a few states like Maharashtra, Tamil Nadu, and Uttar Pradesh accounting for a disproportionate share of enterprises, says a new report.
According to a report by Piramal Finance, despite sustained policy efforts to expand credit access and formalisation, the MSME ecosystem remains marked by significant geographic concentration, uneven credit distribution, and sectoral imbalance. This paper examines inter-state and intra-state concentration of MSMEs, the mismatch between enterprise presence and credit flow, and the implications of sectoral composition for productivity.
Authored by Debopam Chaudhuri, Chief Economist - Piramal Group and his team, the report titled “The Geography of MSMEs: Why India’s Growth Is Concentrated, Not Broad-Based”, examines systemic concentration within India’s MSME ecosystem and outlines regional distribution of enterprises, credit flows and sectoral composition across India.
The report adds that Uttar Pradesh and Bihar remain under-served in formal MSME credit relative to their enterprise base.
