FREE ELECTRONIC LIBRARY - Dissertations, online materials

Pages:   || 2 |

«Available online at ISSN: 2348 – 0343 Growth and Performance of MSME’s in Present Scenario for the Development of India ...»

-- [ Page 1 ] --

International Journal of Interdisciplinary and Multidisciplinary Studies (IJIMS), 2014, Vol 1, No.5, 136-143. 136

Available online at http://www.ijims.com

ISSN: 2348 – 0343

Growth and Performance of MSME’s in Present Scenario for the Development of India

Rupali Sharma 1* and Zia Afroz 2

1 Rama Degree College, Lucknow,India

2 Department of Applied Economics, University of Lucknow, India

*Corresponding Author: Rupali Sharma

“Imparting greater vitality and growth impetus to the Micro, Small and Medium Enterprises (MSME) in terms of output, employment and exports and instilling a competitive culture based on heightened technology awareness” Ministry of Micro, Small and Medium Enterprises (MSME’s) Abstract This is the fact that Micro, Small and Medium Enterprises (MSMEs) play a catalytic role in the development process of most economies of any country. Similarly, MSMEs form the backbone of the Indian economy and have become engine of economic growth in India. Today, MSME occupies a very important positon in Indian Economy System due to its very significant and important contribution in terms of output, exports and employment. The MSMEs are the biggest employment provider after agriculture, providing employment to nearly 32 million people. This paper closely analyses the growth and development of the Indian MSME sector since opening of the economy in 1991. It also looks into the present scenario of MSMEs and the challenges they face like lending, marketing, and license raj issues.

Introduction As we all know India’s economy is an emerging economy and India is the second largest populated country after China. As India is rich in natural resources and also have the man power in bulk. But still the growth rate is quite lower. India is lacking in the capital formation, that’s why it is better to adopt that type of industries and enterprise which are of labour intensive rather than capital intensive. If we go through the following tables, we would able to know that the number of MSMEs as well as its contribution is increasing day by day. MSMEs have been known to the world as “Engine of economic growth and for promoting equitable development”.

Objective of The Study :

1:- To analyse the growth of MSMEs in Indian context.

2:- To anlysis the the performance of MSMEs in present scenario.

3:- To find out the opportunities for entrepreneurs in MSMEs.

4:- To know the contribution of MSMEs in GDP contribution.

5:- To critical examine the opportunities of employment created by the MSMEs.

6:- To examine the competitiveness in market place 7:- To know the seed bed for entrepreneurial ability and innovation 8:- To ascertain the Balanced Regional Development.

Review of Literature:

Lots of literatures are available in the area of MSMEs and related aspect of its components. Brief review of literature are discussed below: Sudan, F. K. (2005)described the challenges in Micro and Small Scale Enterprises Development and policy issues by arising different questions related to Micro and Small Enterprises. The study explained the meaning, advantages, problems and policy options of MSE sector. The study concluded that all the policies which were opted by GOI were the efforts to form a dynamic MSE sector and a diversified economy providing expanded employment opportunities to absorb all new labour force and offer exciting career opportunities.

Rathod, C. B. (2007) described the importance of small scale industrial sector and also the contribution of Indian small scale entrepreneurs in world economy. The main objective of the study was to study the growth and pattern of International Journal of Interdisciplinary and Multidisciplinary Studies (IJIMS), 2014, Vol 1, No.5, 136-143. 137 the SSI sector and identify the reasons for success/ failures, to evaluate the impact of globalization on SSIs and export opportunity, to identify the barriers and constraints that SSIs were facing to cope with globalization.

UNIDO (1969) in a study based on evidence from a number of developing countries indicated that small enterprises with a lower level of investment per worker tend to achieve a higher productivity of capital than do the larger, more capital intensive enterprises.

Bargal et al. (2009) examined the causal relationship among the three variables GDP, SSI output and SSI exports and also have compared the performance parameters of SSIs in the pre and post liberalization era. The study found that the annual average growth rate of different parameters of SSIs have declined in the period of nineties vis-à-vis the pre-reform years. There is an absence of any lead-lag causal relationship between exports and production in small-scale sector and GDP of Indian economy.

Singh et al. (2012) analyzed the performance of Small scale industry in India and focused on policy changes which have opened new opportunities for this sector. Their study concluded that SSI sector has made good progress in terms of number of SSI units, production & employment levels. The study recommended the emergence of technology development and strengthening of financial infrastructure to boost SSI and to achieve growth target.

Bodla, B. S. (2004) concluded that SSI has produced the maximum attainable output given the inputs of capital and labour and the available existing technology. It has also been observed that the SSI sector is no way less than its counterpart large scale industries in so far as the utilization of resources is concerned.

Hashim, (2004) has provided an insight into the strengths and weaknesses of small and medium-sized enterprises. It can also be concluded that there are certain weaknesses that prevail in SMEs and need to be removed.

Hussain, V, Syed. (2004) analyzed that to survive in the world market SSIs should have to lay greater emphasis on international standards with regard to quality, health and hygiene to be offered by them.

Sahoo, K, Sukanta. (2004) examined the contribution of SSI in the industrial sector and concluded that with the decline in agricultural employment and virtual stagnation in the organized manufacturing sector, employment in SSI sector has emerged as the only ray of hope.

Kansal et al. (2009) In their study, an attempt has been made to analyze the impact of globalization on the growth of small scale industries. The comparative analysis of growth pattern of key parameters between Pre- and Post – Globalization periods reveals that the “globalization” had a negative impact on the growth of small scale sector measured in terms of number of units, production, employment and exports. It shows that globalization had a negative impact on the growth of SSI.

Annual Report of MSME 2011-2012, gives the overall view of MSMEs with respect to its performance and growth in production, employment, export, number of industries, detail view of various schemes and of various departments of MSMEs.

Annual Report of MSME 2012-2013,, gives the overall view of MSMEs with respect to its performance and growth in production, employment, export, number of industries, detail view of various schemes and of various departments of MSMEs.

Final Report of Fourth All India Census of MSME, gives a sound, accurate and comprehensive database of MSMEs for sound policy formation.

Garg, C, Charu. (1996) in their research paper describes the growth of SSI with some polisy issues. Here the comparative analysis has been made between large scale and small scale industries taking into the industrial policy resolutions.

Garg, Ishu. And Walia, Suraj. (2012) confirms that the significant growth of MSMEs have been taken place over a period of time and this sector is the major donor to gross domestic product (GDP), employment and exports in Indian economy using the OLS technique.


The Government of India has enacted the Micro, Small and Medium Enterprises Development (MSMED) Act, 2006 in terms of which the definition of micro, small and medium enterprises is as under:

Micro, Small & Medium Enterprises

–  –  –


The Micro, Small and Medium enterprises (MSMEs) play a pivotal role in the overall industrial economy of India.

MSMEs constitute more than 80% of the total number of industrial enterprises and support industrial development.

MSMEs contribute nearly 45% to manufacturing and about 40% to the Indian export sector. Their contribution to the Indian GDP is 8% and the sector has registered growth rate of 10.8%. Indian MSMEs have moved up from the manufacture of traditional goods including leather, gems and jewelry, agricultural goods to much more value addition in the manufacturing sector to its entry in the value added services as well. It is one of the major growth driver of Indian Economy. It is based on the Model of Socio economic policies of the Govt. of India. It develops appropriate indigenous technology. It possess the second largest sector after agriculture. It includes more than 26 million units which are producing more than 8000 products within the country. It provides employment to over 59 million.


–  –  –


International Journal of Interdisciplinary and Multidisciplinary Studies (IJIMS), 2014, Vol 1, No.5, 136-143. 139


MSME’S has definetly helped in growth of Indian Economy by creating oppurtunities for Enterpreneurs and by creating a number of employment vacancies, as well as it has a very powerful impact on Investments and Gross output also which is explained as below through the statistics.

Performance of SSI / MSME Units, Employment, Investments and Gross Output

–  –  –

On the basis of graph we can see an increasing trend in number of Enterprises in MSMEs Sector. As in 2006-07 the number of working enterprises was 361.76 and increases to 377.37 in 2007-08 with the increased percentage of

4.32. Till the 2008-09 the no. of enterprises reached to 393.70 with the increase of approx. 4.33%. After this the no. of enterprises reached to 410.82 till 2009-10 that is 4.35%. Upto the year 2010-2011 the no. of enterprises increases with 4.37%. In 2011-12 the no. of enterprises reached to 447.73 with the 4.42%.

International Journal of Interdisciplinary and Multidisciplinary Studies (IJIMS), 2014, Vol 1, No.5, 136-143. 140

–  –  –

2006-07 361.76 -B) Employment in MSME Sector

–  –  –

2007-08 842.23 4.59 2008-09 881.14 4.62 2009-10 922.19 4.66 2010-11 965.69 4.72 2011-12 1012.59 4.86

C) Fixed Investment in MSME Sector International Journal of Interdisciplinary and Multidisciplinary Studies (IJIMS), 2014, Vol 1, No.5, 136-143. 141 Projected data for the years 2007-08 to 2011-12.

D) Gross Output in MSME Sector Projected data for the years 2007-08 to 2011-12.


–  –  –

 Performance and Credit Rating Scheme Financial assistance on bar code International Journal of Interdisciplinary and Multidisciplinary Studies (IJIMS), 2014, Vol 1, No.5, 136-143. 142 ASSOCIATION AND REGULATING BODIES FOR MSME’s :There are mainly two regulating boundaries regarding MSME’s:

–  –  –

INDIAN MSME’s SECTOR: CHALLENGES Despite its commendable contribution to the Nation's economy, MSME Sector does not get the required support from the concerned Government Departments, Banks, Financial Institutions and Corporate, which is a handicap in becoming more competitive in the National and International Markets.

MSMEs face a number of problems –

- Mentoring and advocacy

- Credit

- Absence of adequate and timely banking finance,

- Limited capital and knowledge,

- Infrastructure

- Globalization of trade and commerce

- Non-availability of suitable technology,

- Low production capacity, ineffective marketing strategy,

- Identification of new markets or market access,

- Constraints on modernization & expansions,

- Non availability of highly skilled labour at affordable cost,

- Follow-up with various government agencies to resolve problems

- Exit mechanism

- Strategy interventions for revitalization and growth etc.


MSMEs, as a major contributor towards growth of domestic economy and employment generation, should also get adequate support for its growth and development in terms of policy framework, incentives and other relevant aids and supports like providing good infrastructural facilities, developing various industrial parks and technology incubators under MSME cluster development programmes, creating networks of organisations which help to provide training to the skilled workforce to improve productivity, encourage entrepreneurship and competency in management, funding R&D investments, technology advancement may work for the betterment of the sector.

Although, Indian MSMEs are finding it difficult to sell their products in the domestic and international markets because of increasing competition and to make their products globally competitive, Indian MSMEs need to up-grade their technology and put more emphasis on innovation.


1. Bonfring International Journal of Industrial Engineering and Management Science, Vol. 1, Special Issue, December 2011 “MSMEs: The Key to Entrepreneurship Development in India” Dr.K. Alamelu and R.

Baskaran IJMBS Vol. 3, Iss ue 2, April - June 2013 “Sustainable Trends and Policies of MSME in Economic 2.

Development in India: An Empirical Study”

3. http://www.kvb.co.in/msme/msme.html

4. http://msme.gov.in 5. "Innovation readiness of Indian SMEs - Issues and challenges" Year : February 2012, annual FICCI MSME Summit 2012 Sudan, F. K. (2005), “Challenges in Micro and Small Scale Enterprises Development: Some Policy Issues”, 6.

Synergy: I. T. S. Journal of IT and Management, Vol. 3, No. 2, July 2005, PP: 67-81.

Pages:   || 2 |

Similar works:

«Adam S. Yore Department of Finance Home Address: 425 Cornell Hall 3100 Wisteria Ln. University of Missouri Columbia, MO 65203 Columbia, MO 65211 (813) 786-1966 (573) 884-1446 yorea@missouri.edu Research Interests: Corporate Governance, Corporate Deal-Making Activity, Corporate Investment Teaching Interests: Corporate Finance Education: LeBow College of Business, Drexel University Ph.D., Finance, 2009 Dissertation Title: Three Essays in Corporate Governance Dissertation Advisor: Dr. Ralph A....»

«ISSUES IN FEATURE FILM DISTRIBUTION July 2015 ISSUES IN FEATURE FILM DISTRIBUTION Contents About this report Introduction The evolving distribution landscape: impacts and challenges Impacts across the release chain The production environment: financing impacts The cinema environment The home video and television environment Responding to change: some new strategies and business models 1. Cinema on demand 2. Event screenings 3. Customised approaches to the theatrical window 4. Elevated digital...»

«Hairdressers WA Award Summary Things to check as an employee or employer include:  Pay rates  Employment of children  Allowances and Meal Breaks  Overtime rates  Public holidays  Easter Eve provisions  Leave entitlements  Dismissal laws and entitlements due on termination  Time and wages record keeping  Laws relating to taxation, superannuation, workers compensation, discrimination and occupational health and safety This WA award summary outlines only the most...»

«TEACHING MORALITY: JAVANESE ISLAMIC EDUCATION IN A GLOBALIZING ERA1 Ronald A. Lukens-Bull UNIVERSITY OF NORTH FLORIDA, JACKSONVILLE As Indonesia strives to overcome its position as a periphery nation, its populations are faced with increasing challenges to traditional identity and morality. With economic development comes a great exposure to global consumer culture. This paper examines how traditionalist Muslims in Java, Indonesia, are facing the perceived impact of globalization through...»

«  ADVANCES IN GLOBAL BUSINESS RESEARCH (Vol. 10, No. 1 ISSN: 1549-9332) 2013 Proceedings of the Tenth World Congress of the Academy for Global Business Advancement (AGBA) Held at the King Mongkut's Institute of Technology Ladkrabang (Thailand) On June 15-17, 2013 Edited By David McArthur Utah Valley University Orem, Utah, USA Rajan Varadarajan Texas A&M University College Station, Texas, USA Zafar U. Ahmed Lebanese American University Beirut, Lebanon Volume 2 of 2 i    Preface This volume...»

«Studies in Chinese Linguistics A Note on Caa in Cantonese and its Grammatical Category Ben Wai Hoo Au Yeung The Chinese University of Hong Kong Abstract On par with the colloquial a grand for “a thousand dollars” in English, there is the colloquial caa for cin ‘a thousand dollars’ in Cantonese. By means of distributional properties, cin and caa will be shown as synonyms, but remain nonequivalent. Finally, caa and other synonyms regarding money-multiples will be syntactically argued as...»

«American Journal of Business Education – July 2011 Volume 4, Number 7 Topics In Finance Part VI – Capital Budgeting Judy Laux, Colorado College, USA ABSTRACT This series on the theory of financial management offers insight into the roles of stockholder wealth maximization, the risk-return tradeoff, and agency conflicts as they apply to major topics in finance. The current article investigates capital budgeting. Much literature addresses this topic, with a number of articles challenging...»

«Health Systems in Transition Vol. 17 No. 2 2015 Ukraine Health system review Valery Lekhan • Volodymyr Rudiy Maryna Shevchenko • Dorit Nitzan Kaluski Erica Richardson Erica Richardson (Editor) and Ellen Nolte (Series editor) were responsible for this HiT Editorial Board Series editors Reinhard Busse, Berlin University of Technology, Germany Josep Figueras, European Observatory on Health Systems and Policies Martin McKee, London School of Hygiene & Tropical Medicine, United Kingdom Elias...»

«ARGYLL AND BUTE COUNCIL ENVIRONMENT, DEVELOPMENT AND INFRASTRUCTURE COMMITTEE DEVELOPMENT AND INFRASTRUCTURE SERVICES 13 AUGUST 2015 UPDATE ON A83 REST AND BE THANKFUL 1.0 EXECUTIVE SUMMARY This report provides an update on the A83 Rest and Be Thankful. Members will be aware that there has been a long standing issue regarding the stability of land adjacent to the A83 for many years. There have been numerous ‘landslips’ and material wash outs which have resulted in the A83 being unavailable...»

«NBER WORKING PAPER SERIES HOW DID PRE-FED BANKING PANICS END? Gary Gorton Ellis W. Tallman Working Paper 22036 http://www.nber.org/papers/w22036 NATIONAL BUREAU OF ECONOMIC RESEARCH 1050 Massachusetts Avenue Cambridge, MA 02138 February 2016 The authors thank Jeremy Atack, Howard Bodenhorn, Michael Bordo, Charles Calomiris, Andrew Coleman, Ben Craig, Stanley Engerman, Kinda Hachem, Eric Hilt, Gary Kornblith, Arvind Krishnamurthy, Jon Moen, Hugh Rockoff, George Selgin, Larry Wall, Warren Weber,...»

«Jobs and Joining: What's the Effect of WTO for China's Urban Employment? Dorothy J. Solinger University of California, Irvine East Asian Institute, Columbia University dorjsoli@uci.edu March 2002 Prepared for the Conference, The Political and Economic Reforms of Mainland China in a Changing Global Society, sponsored by the College of Social Sciences, National Taiwan University, Taipei, Taiwan, April 25-27, 2002. 2 On December 11, 2001, after fifteen years of tortuous and often tense...»

«Symmetry: Art and Science Tihany Congress, 2004 Folk Architecture – Vernacular Architecture An International Conference, Hungary, 2012 Appendix PROPORTION ANALYSES OF TRADITIONAL VERNACULAR ARCHITECTURE (TVA) Joachim Langhein Name: Dr. Joachim Langhein, Economist, Ecologist, Geographer, Japanologist, private Researcher on Proportion in Architecture since 1978, global human ecology (since 1969) Born in Potsdam, Germany, 1942), grown up in Hamburg-Volksdorf, 2 years Berlin, since 1958...»

<<  HOME   |    CONTACTS
2016 www.dissertation.xlibx.info - Dissertations, online materials

Materials of this site are available for review, all rights belong to their respective owners.
If you do not agree with the fact that your material is placed on this site, please, email us, we will within 1-2 business days delete him.