New Delhi, Jan 9 (KNN) The State Bank of India (SBI) revealed that approximately 19.5 per cent of predominantly micro-sized firms have successfully elevated their income, leading to their reclassification as Small, Medium, and Large-sized entities.
In a report released on Monday, SBI highlights a noticeable shift in the income patterns of Micro, Small, and Medium Enterprises (MSMEs), illustrating the evolving landscape of industry and services.
This transformation is attributed to the formalisation drive, which has brought a greater number of entities into the economic fold.
Within this cohort, 4.8 per cent of firms have transitioned to small-scale, 6.1 per cent to medium-scale, and 9.3 per cent to large-scale establishments.
The report emphasises that this shift indicates MSME units are expanding and becoming integrated into larger value chains, propelled by initiatives like Production-Linked Incentives (PLI).
The SBI study further discloses a substantial increase in an individual’s weighted mean income, soaring from Rs 3.1 lakhs to Rs 11.6 lakhs during FY2014-2021.
Projecting future trends, the report estimates the weighted mean income for FY22 to fall within the range of 12.5 lakhs to 13 lakhs, aligning with their earlier August 2023 forecast.
The concept of weighted mean income serves as a nuanced measure, offering a rough assessment of income increase within specific brackets and their contributions to overall growth.
In contrast to the simple mean income, which calculates the ratio of total income to the total number of taxpayers, the report notes that the weighted mean income becomes more significant when each income group’s contribution intensifies towards the total income growth.
“Mean income would shoot up if income is increasing along any bucket (upper, middle, or lower) but weighted mean income would increase more when the contribution of each income group is increasing towards total income growth,” it added.
(KNN Bureau)
