MSME Sector in India – Its Importance in the Indian Economy

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The Government of India lays great importance to the development of the SMEs including the micro, small and medium enterprises. According to the Ministry of Micro, Small and Medium Enterprises (2012-2013) launched its Results-Framework Document (RFD), the Government’s mission is to promote the development or growth of competitive micro, small and medium enterprises on a global level which would include the Khadi, village and Coir industries. This is carried out in cooperation with the concerned departments and the Ministry, the State Governments and other stakeholders to provide support to the existing SMEs and encourage the creation of new enterprises.

The MSMEs play a significant role in the development of the social and economic development of the country. The MSMEs growth of the micro, small and medium enterprises for the 12th Five Year Plan of the current government (2012-2017), this sector accounts to 45% of the manufacturing output and as much as 40% of the total exports of the country. The MSMEs of our country monitors over 6000 products which range from traditional to the highly technical items manufactured by the industries. As compared to the large scale industries, the SMEs as per the reports of the MSMEs have a greater ratio of the labor to capital. Even the geographic distribution of the MSMEs is also greater even as compared to the large scale industries. Hence, the role of the MSMEs is significant to attaining the national objectives and economic goals for the growth.

The MSMEs are highly heterogeneous sectors in terms of the size of the micro, small and medium enterprises, the variety of the products offered by these and the level of technological advancement. The specialized feature of the MSMEs is that it attributes to low investment requirement combined with higher operational flexibility and mobility and greater returns. Thus, the role of the MSMEs is greatly significant in the development and the growth of the Indian economy.

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