The establishment and subsequent development of the micro, small and medium enterprises (MSME) sector should be the priority of the state Government as had been in almost other parts of the country. accordingly, as per the Results-Framework Document (RFD) for Ministry of Micro, Small and Medium Enterprises (2012-2013), the Mission of the government is to – “Promote growth and development of globally competitive Micro, small and Medium Enterprises, including Khadi, Village and Coir industries, in cooperation with concerned Ministries / Departments, State Governments and other stakeholders by providing support to existing enterprises and encouraging creation of new enterprises. To endeavor to achieve a cumulative growth of 40%-50% in the number of registered enterprises by the end of 12th Plan and enhance this sector’s contribution to GDP from the present 8% to 10% by the end of 12th Plan.” The role and importance of micro, small and medium enterprises (MSMEs) in the economic and social development of the country and the state is well established, especially in a state like Manipur where the feasibility of setting up large corporations and enterprises is next to nothing owing to a number of factors, both intrinsic to the land and man-made. As per the Report of the Working Group on Micro, Small and Medium Enterprises (MSMEs) Growth for 12th Five Year Plan (2012-2017), the sector accounts for 45% of the manufacturing output and 40% of total exports of the country. The sector provides employment to about 69 million persons through 26 million enterprises throughout the country. Over 6000 products ranging from traditional to high-tech items are being manufactured by the MSMEs in the country. The labour to capital ratio in MSMEs and the overall growth in the sector is much higher than in the large industries. The geographic distribution of the MSMEs is also considered more even. Over the years, the small scale sector in India has progressed from the production of simple consumer goods to the manufacture of many sophisticated and precision products. The process of economic liberalization and market reforms has further exposed these enterprises to increasing levels of domestic and global competition. It may also be said that the MSME sector in India is highly heterogeneous in terms of the size of the enterprises, variety of products and services produced and the levels of technology employed. While one end of the MSME spectrum contains highly innovative and high growth enterprises, more than 94% of MSMEs are unregistered, with a large number established in the informal or unorganized sector. (MSME) sector is characterized by low investment requirement, operational flexibility and location wise mobility. The importance and contribution of the SME sector to the economic growth and prosperity cannot be stressed enough, and the Government’s policy initiatives like enactment of the Micro Small and Medium Enterprises Development (MSMED) Act, 2006, pruning of reserved SSI list, proposal for increase of credit flow to the SME sector, are all initiatives towards boosting entrepreneurship, investment and growth. Reservation of items for exclusive manufacture in MSME sector statutorily provided for in the Industries (Development and Regulation) Act, 1951, has been one of the important policy measures for promoting this sector. The state Government cannot afford to delay the inevitable but should instead proactively pave the way for creating a smooth, swift and successful MSME sector which will bring down the dependence on largesse from the centre for almost every development activities as the sector will take care of unemployment, social unrest and economic constraints to a very large extent.