Indian equities are back in favour, aren’t they? The BSE Sensex surged a handsome 800 points at noon, brushing aside global economic worries that had triggered a 2000-point fall just days earlier. This swift recovery begs the question: Have Indian markets truly shrugged off global anxieties, or is there more beneath the surface?

Market Resilience A True Picture?

This week’s market rebound certainly paints a picture of resilience. Analysts point to historical trends, noting India’s economic performance has often moved independently of the US, as highlighted in a Sanford Bernstein report. They suggest that even a mild US recession could benefit India by moderating commodity prices. However, we must not overlook the internal challenges. Concerns around earnings growth moderation are real, as data from Motilal Oswal Financial Services indicates. Expensive valuations also pose a question mark on the sustainability of this rally.

MSMEs The Real Engine

While market indices grab headlines, the true backbone of the Indian economy remains its Micro, Small, and Medium Enterprises MSMEs. Contributing nearly 30 per cent to the GDP and employing a staggering 12 crore people, these enterprises are the unsung heroes driving growth. Yet, they grapple with significant hurdles – access to finance, technology, and skilled labour, to name a few. Banks like YES BANK are playing a crucial role in addressing these challenges. By offering tailored financial products, digital solutions like YES Connect and Smart Pay, and leveraging government schemes, YES BANK is actively supporting the MSME sector. This support is not just about loans; it’s about creating an enabling environment for these businesses to thrive and compete.

For India to truly realise its economic potential, the focus must be on strengthening the MSME sector. Market optimism is welcome, but sustained growth hinges on the robust performance of these enterprises. Investing in and empowering MSMEs is not just good economics; it is the bedrock of a prosperous future for India.

Will the Sensex continue its upward trajectory? Perhaps. But for enduring economic strength, attention must remain firmly fixed on nurturing the might of India’s MSMEs. They are, after all, the real engine of our growth story.

Image Courtesy: X (Yes Bank)