BV Naidu, Chairman of Karnataka Digital Economy Mission

Micro, small and medium enterprises (MSMEs) will play a pivotal role in helping India achieve developed nation status by 2047, but the sector requires stronger policy support, easier access to capital, infrastructure and talent, according to BV Naidu, Chairman of Karnataka Digital Economy Mission (KDEM).

Speaking at the fifth edition of businessline MSME Growth Conclave on Thursday, Naidu said India’s aspiration of becoming a developed economy hinges on significantly raising per capita income from the current $2,200 levels.

“India has become the fourth-largest economy, and is poised to become a $32-trillion economy by 2047. But unless our per capita income grows to $20,000-25,000, we will not become a developed country,” he said, adding that MSMEs will play an even larger role than large enterprises in driving this transformation.

Highlighting the growing importance of technology-led growth, Naidu said India’s digital economy is estimated at about $500 billion, and contributes roughly 13 per cent to the national economy. Karnataka, however, derives between 35 per cent and 40 per cet of its economy from digital sectors.

“Karnataka’s digital economy is expected to exceed $400 billion by 2031-32. MSMEs have been integral to the growth of India’s IT industry because they are agile and capable of rapid innovation,” he said.

critical pillars

Naidu identified four critical pillars for MSME growth — access to government projects, market access, infrastructure and talent. He noted that participation in government procurement remains challenging for smaller firms because of requirements such as earnest money deposits and eligibility norms.

Access to finance also remains a key concern. According to Naidu, around 2,500 start-ups registered with State Bank of India’s Koramangala start-up branch in less than a year, with collateral-free loans worth ₹1,200 crore sanctioned.

The Karnataka government’s Elevate programme has also supported start-ups and MSMEs through grants of up to ₹50 lakh, with ₹293 crore disbursed so far.

On infrastructure, Naidu pointed to Karnataka’s network of 32 Centres of Excellence and initiatives such as Semiconductor Fabless Accelerator Lab (SFAL), which provide MSMEs access to testing facilities and technology infrastructure.

He also highlighted KDEM’s Beyond Bengaluru initiative, aimed at building technology ecosystems across the State. “Belagavi has 1.7 lakh MSMEs and Mysuru has 1.5 lakh. Now is the time for MSMEs to perform,” he said, adding that government support would be critical in helping smaller firms navigate the ongoing AI-driven transformation.

Published on June 25, 2026