Daijiworld Media Network - Kochi
Kochi, Jun 24: The Institute of Small Enterprises and Development (ISED) has proposed a major shift in India’s approach towards supporting micro, small and medium enterprises (MSMEs), urging policymakers to move beyond subsidies and promotional schemes and adopt a comprehensive strategy focused on protecting businesses from economic risks.
The proposal, unveiled in the India MSME Report 2026, was released on Wednesday by Mercy Epao, Joint Secretary in the Ministry of MSME.
At the centre of the report is the concept of “enterprise security”, which argues that safeguarding the survival of MSMEs should become a national economic priority, similar to the principles underlying India’s food security framework.
According to the report, small businesses remain particularly vulnerable to disruptions caused by global economic downturns, geopolitical tensions and public health crises.
The institute noted that recent events such as the Covid-19 pandemic and continuing instability in West Asia have highlighted the disproportionate impact such crises can have on MSMEs.
It pointed to a phenomenon described as “asymmetric lagging vulnerability”, where the consequences of a crisis are not immediately visible but gradually intensify over time through rising costs, weakening consumer demand and mounting pressure on employment.
ISED said that emergency measures introduced during crises, including short-term credit support schemes, often address only immediate concerns and fail to tackle deeper structural problems.
These long-term challenges include limited access to finance and technology, shrinking profit margins and increasing market uncertainties.
To address these issues, the institute has proposed an Enterprise Security and Resilience Framework, which advocates coordinated action involving governments, banks, insurance providers and business promotion agencies.
The framework is intended to help entrepreneurs manage interconnected risks that could threaten the sustainability of their businesses.
“Entrepreneurship itself is a public good and deserves protection,” said ISED Director Dr P.M. Mathew, adding that governments should ensure businesses have access to essential resources such as affordable financing, technology and market opportunities.
The report argues that India must transition from a policy model focused solely on promoting MSMEs to one that actively works to reduce their exposure to risks and build long-term resilience.
It emphasises that strengthening the MSME sector is critical because of its significant contribution to employment generation, innovation and overall economic growth.
The proposed framework has also received international attention.
Max Balakoviskiy of the Organisation for Economic Co-operation and Development (OECD) described it as an innovative contribution to global discussions on MSME policy.
Meanwhile, former Insurance Regulatory and Development Authority of India (IRDAI) member Thomas Devasia stressed the importance of closer integration between banking and insurance services to provide stronger support mechanisms for small businesses.