MSME Skill Training: Report Reveals 71% Ineffectiveness
Government skill training programs are failing a crucial segment of the Indian economy. A recent report reveals a staggering 71% ineffectiveness rate among MSMEs, highlighting a significant challenge to the growth of the manufacturing industry. This impacts the overall productivity and competitiveness of these businesses. Moreover, 61% of MSMEs lack access to existing government initiatives. While infrastructure spending and modern industrial parks offer potential solutions, critical gaps in skills and logistics remain. Read the latest from News Directory 3 to understand the critical need for effective MSME skill training programs and how these businesses can thrive. Discover what’s next …
MSMEs Struggle to Access Government Skill Training Programs
Updated June 29, 2025
A significant portion of India’s Micro, Small and Medium Enterprises (MSMEs) are not benefiting from government skill and talent initiatives, hindering the growth of the manufacturing industry. A Cushman & Wakefield report indicates that 71% of small firms believe government-run skill-training programs have not provided tangible assistance. This lack of effective training impacts the overall productivity and competitiveness of these businesses.
The report further highlights that 61% of MSMEs reported a lack of access to these government initiatives, while only 39% confirmed receiving benefits. The survey focused on small firms with fewer than 500 employees, a critical segment of the Indian manufacturing landscape.
MSMEs employ 4 out of every 5 manufacturing workers and contribute 40% of the sector’s total output.However, the report notes a significant productivity gap: each worker in an MSME generates only 14% of the output of a worker in a larger plant. This disparity underscores the need for improved skills and technology adoption within MSMEs to boost their contribution to the manufacturing industry in India.
To address these challenges, the government has allocated ₹2,500 crore for 12 sector-specific plug-and-play parks. These parks aim to accelerate plant setup,reduce capital expenditure,support SMEs,and attract foreign direct investment. These initiatives are designed to strengthen India’s manufacturing industry.
Infrastructure spending appears to be influencing capital expenditure. According to the survey, 88% of respondents said that government infrastructure spending has influenced their capital expenditure plans.Furthermore, 93% reported better operating efficiency and profitability in areas with modern industrial parks and corridors.
Gautam Saraf, executive managing director at Cushman & Wakefield, said India must address cost and capacity gaps in logistics, integrated facilities, and MSME productivity. He added that plug-and-play industrial parks, multimodal logistics networks, and improved land aggregation frameworks are essential for converting policy momentum into production-ready outcomes.
Improved access to logistics was reported by 95% of respondents, while 94% of large enterprises credited infrastructure upgrades as central to their growth strategies. These improvements are crucial for enhancing the overall efficiency of the manufacturing sector.
Despite these advancements,challenges remain. High logistics costs, limited warehousing capacity, minimal domestic value addition, and persistent skill gaps, especially within MSMEs, pose threats to long-term competitiveness in the manufacturing industry.
What’s next
To enhance the manufacturing industry in India, future efforts must focus on bridging the skill gap within msmes and improving access to government support programs. Addressing infrastructure limitations and reducing logistics costs will also be crucial for sustained growth and global competitiveness.