Under Rule- 50, an urgent matter on "Critical Role of MSME in improving Nagaland's Economy" was raised by Advisor, Industries & Commerce, Hekani Jakhalu on the 4th Day of the Eight Session of August House, at NLA Hall, Kohima on 10th March 2026.
During the discussion, Hekani addressed the growth and challenges of Micro, Small and Medium Enterprises (MSMEs) in Nagaland and highlighted the crucial role of the sector in driving the state’s economy, while also stressing the need for greater policy support and financial access for small entrepreneurs.
Speaking during the deliberations, she stated that MSMEs act as the silent growth engine of the state, creating employment opportunities and contributing significantly to the local economy without depending heavily on government salaries or financial assistance. The sector was described as one that quietly sustains livelihoods and generates local jobs across Nagaland.
Providing statistics, she pointed out that MSMEs were earlier categorized under the Unorganized Sector, making it difficult to accurately assess their contribution. However, the Advisor said that the situation has been improving with increased registration under the Udyam Portal. In 2023–24, Nagaland recorded 27,083 MSMEs under Udyam registration and with the launch of the World Bank-assisted Raising and Accelerating MSME Performance (RAMP) scheme by Chief Minister Dr. Neiphiu Rio on 27th August 2024, the number of registration has reportedly increased to over 48,000, generating thousands of employment opportunities across the state.
The formalization of MSMEs through Udyam registration was highlighted as an important step toward bringing informal businesses into the formal economy. Jakhalu stated that formalization enables entrepreneurs to access government schemes, credit facilities, public procurement opportunities and other subsidies aimed at strengthening the MSME ecosystem. The growth of the start-up ecosystem in Nagaland was also noted by the Advisor. According to the available data, the state currently has 267 registered start-ups, including 92 private limited companies. These ventures have generated a revenue of around ₹74 crore and created more than 1,500 jobs during the 2024–25 period.
Despite these achievements, Hekani said that several challenges continue to hinder the growth of MSMEs in the state. Among the key concerns highlighted were limited access to finance due to strict collateral requirements and inadequate banking infrastructure. Inconsistent power supply and high energy costs were also cited as major obstacles affecting business operations.
The Advisor also said that poor road connectivity remains another challenge, as bad road conditions increase transportation costs and delay the movement of goods and commodities. In addition, the issue of multiple or unregulated taxation faced by businesses was raised, with concerns that such conditions discourage entrepreneurship and deter outside investors from entering the state.
Emphasizing the need for a long-term strategy, she suggested that Nagaland must align its development planning with the national vision of Viksit Bharat 2047.
Jakhalu mentioned that particular attention should be drawn to nano-enterprises, which account for nearly 95 percent of businesses in the state. These ultra-small enterprises, often run by individuals or small partnerships, operate in sectors such as livestock, manufacturing, services, trade, tailoring, welding, handicrafts, small shops and street vending. While they contribute significantly to the local economy, they remain one of the most underserved segments, with limited access to formal credit. She noted that many nano-entrepreneurs are compelled to rely on informal lenders due to difficulties in accessing institutional finance, which often involves lengthy procedures such as preparing project reports, departmental vetting and bank approvals.
In this regard, a call was made for the government to revisit existing financial schemes such as the Chief Minister’s Micro Finance Initiative (CMMFI) and consider provisions specifically designed for nano-entrepreneurs. Small loans ranging from ₹10,000 to ₹50,000, and in some cases up to ₹1 lakh, were suggested as crucial for meeting immediate needs such as raw materials, equipment, inventory and working capital.
With targeted interventions and stronger policy support, Jakhalu expressed that MSMEs, entrepreneurs and the youth of Nagaland could play a vital role in building a self-reliant economy and achieving the broader goal of Viksit Nagaland 2047.
Advisor for New & Renewable Energy and NSDMA, Z. Nyusietho Nyuthe, while participating in a discussion on the topic “Critical role of MSME (Micro, Small and Medium Enterprises) in improving Nagaland’s economy” in the Nagaland Legislative Assembly, highlighted the importance of the MSME sector in strengthening the state’s economy and generating employment.
Nyuthe said that, with the advent of modern education and increasing interaction with the outside world, the need for greater inter-dependence and economic opportunities has grown.
Referring to the Survey Report on Employment, Unemployment, Skill and Migration in Nagaland 2025 released by the Directorate of Economics and Statistics (DES), he said that the State’s employment rate stands at 83.92%, while the unemployment rate is 16.07%, which is higher than the national unemployment rate. He emphasised the importance of promoting MSMEs to drive economic growth. According to him, MSMEs have significant potential in sectors such as home-based production, food processing, handloom and handicrafts, which can create employment opportunities, especially for the youth.
To address unemployment, Nyuthe suggested training youths in vocational skills such as masonry, plumbing, tiling, electrical works and mechanical services at district headquarters so they can find opportunities in the construction sector. He also called for measures to ensure greater participation of local youths in business activities and stressed the need to foster mutual trust and cooperation among communities.
Further, he proposed the introduction of one manual job oriented subject in the school curriculum from Class 5 to Class 12 to encourage skill development from an early stage. He added that with proper skill development and support for MSMEs, the sector can play a key role in improving Nagaland’s economy and generating sustainable livelihoods.
Advisor for Civil Administration Works Division and Taxes, Kudecho Khamo participating in the discussion said that MSMEs help create jobs at lower capital cost, particularly in rural and semi-urban areas, while also encouraging balanced regional development and reducing migration.
Khamo, said that in Nagaland, MSMEs are increasingly contributing to employment generation and economic development. According to available reports, over 48,000 units in the state have registered under UDYAM, including manufacturing and service enterprises, providing employment opportunities to many youths.
However, he pointed out that the sector still faces challenges such as financial constraints, inadequate infrastructure and limited digital adoption. He stressed that improving access to finance, strengthening skill development and introducing effective policy interventions are necessary to sustain MSME growth in the state.
The Advisor expressed appreciation to Chief Minister Dr. Neiphiu Rio for initiating several programmes to support entrepreneurship and MSME development in Nagaland. He mentioned initiatives such as Raising and Accelerating MSME Performance (RAMP), Nagaland Entrepreneurship Impact Forward (NEIF) 2035, the Nagaland Skill Entrepreneurship Development Mission (NSEDM) 2025, and the Chief Minister’s Micro Finance Initiative (CMMFI), which aim to promote entrepreneurship, create employment and support livelihood activities. He also noted the push for digital initiatives, including the use of the “My MSME” app and the establishment of an all-women BPO centre in Dimapur.
Khamo, said that with such policies and initiatives in place, the youth of Nagaland should look beyond government jobs and explore entrepreneurship and business opportunities that can generate employment and income.
He further urged banks and financial institutions operating in the state to play a more proactive role in supporting entrepreneurs by providing credit and financial assistance to MSMEs. He noted that stronger cooperation between the government, financial institutions and aspiring entrepreneurs is essential for the growth of the sector.
In conclusion, the Advisor stated that Nagaland has rich natural resources, cultural strengths and talented youth, and that with continued government support and active participation from financial institutions, the MSME sector can significantly contribute to the State’s economic growth and overall development.
While discussing on the same issue, MLA Jwenga Seb said that MSMEs recognised under the Micro, Small and Medium Enterprises Development Act, 2006, are the backbone of grassroots economic activity and can help convert Nagaland’s resources into productive industries. According to him, the sector can transform agricultural produce into packaged organic foods, develop herbal and wellness products, promote bamboo-based manufacturing, and expand the state’s handicraft and handloom industries.
Seb also referred to national initiatives such as the Prime Minister’s Employment Generation Programme, Credit Guarantee Fund Trust for Micro and Small Enterprises, Startup India and Atmanirbhar Bharat Abhiyan, stating that these schemes provide financial support, skill development and market opportunities for entrepreneurs.
However, he pointed out several challenges hindering MSME growth in the state, including misuse of subsidy-linked schemes, limited access to credit due to landholding practices protected under Article 371A of the Constitution of India, inadequate infrastructure, connectivity and market access.
To address these issues, Seb suggested creating innovative credit mechanisms in collaboration with institutions like National Bank for Agriculture and Rural Development (NABARD) and Small Industries Development Bank of India (SIDBI). He also called for the establishment of MSME and agro-processing clusters with plug-and-play infrastructure and the promotion of a strong “Made in Nagaland” branding campaign to expand market access for local products.
He concluded that strengthening MSMEs is essential for transforming Nagaland from a consumer state into a producer economy while generating employment for youth and promoting long-term economic self-reliance.
Speaking on the issue Advisor for Social Welfare Wangpang Konyak said that in the absence of large industries and corporate investments, MSMEs remain the most viable source of employment for the youth and play a key role in strengthening the rural economy.
Konyak highlighted that value addition through food processing, bamboo furniture manufacturing, weaving, spice grinding and branding can significantly enhance farmers’ income and make rural areas economically sustainable.
He also stressed the need to promote local production to build a self-reliant economy, stating that producing goods locally would help retain money within the state and reduce dependence on outside markets.
The Advisor further pointed out that MSMEs also help preserve Naga cultural heritage by promoting traditional crafts such as handloom, bamboo work and indigenous designs while creating livelihood opportunities for artisans.
Konyak called for improved infrastructure such as cold storage facilities, warehouses, rural markets and food processing centres to reduce post-harvest losses and support farmers and entrepreneurs.
He further emphasized the role of self-help groups under the National Rural Livelihood Mission in promoting micro-entrepreneurship, encouraging savings and enabling members to collectively produce and market their products.The Advisor stressed the need for supportive policies, affordable loans, subsidies, credit guarantees, and entrepreneurship training to help local businesses grow and sustain in the long run.
In his closing remark on the Matter of Urgent Public Importance in the House, Speaker NLA Sharingain Longkumer noted that around 48,000 MSMEs are currently registered in the state. He appreciated the Department of Industries and Commerce for presenting a comprehensive data analysis on the sector.
The Speaker said that if the data is evenly distributed, each assembly constituency could have around 800 registered enterprises. He encouraged legislators to examine how many of these are nano and micro enterprises and assess their turnover and contribution to the local economy.
Longkumer also emphasized that such analysis would help address issues of unemployment and employability among the younger generation. He urged members of the House to coordinate with the concerned department and contribute inputs to strengthen policies and support MSME growth in their respective constituencies.
(DPRO Kohima, Takumpula Longkumer, IA)
