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An Analysis of Micro, Small and Medium Enterprises in India

The presentation is about a brief study of MSME sector in India regarding GDP, employment and inclusive growth. The study also covers various challenges facing by this sector and also the governmental intervention for solutions of these challenges.

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An Analysis of Micro, Small and Medium Enterprises in India

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  1. ABDUL MOIZZGH-8567 16-ECM-17 AN ANALYSIS OF MICRO, SMALL AND MEDIUM ENTERPRISES IN INDIA

  2. CONTENT • INTRODUCTION • CLASSIFICATION OF SSI PRIOR TO MSMED ACT 2006 • DEFINITION OF MSMEs • PRODUCTS • CONTRIBUTION • ROLE OF MSME IN EMPLOYMENT • ECONOMIC GROWTH AND EXPORTS • MSMEs AND INCLUSIVE GROWTH • CHALLENGES FOR MSMEs • GOVERNMENT ROLE • MAJOR PLANS & SCHEMES IMPLEMENTED BY THE MINISTRY • RECENT INITIATIVES • CONCLUSION

  3. INTRODUCTION The SSI or MSMEs Sector is • Highly Vibrant and Dynamic sector of • Indian economy • The engine of economic growth • Promote equitable economic development • Complementary to large industries • Panacea for several economic woes

  4. CLASSIFICATION OF SSI PRIOR TO MSMED ACT 2006

  5. Before MSMED Act, 2006 the SSI sector covers a wide spectrum of industries- • Small-scale industrial undertakings • Ancillary industrial undertakings (ANC) • Export-oriented units (EOUs) • Tiny Enterprises (TINY) • Small-scale service enterprises (SSSEs) • Small-scale service business enterprise (SSBEs) • Artisans, Village and Cottage Industries • Women Enterprises

  6. The Small Scale industrial sector contributes significantly • to India’s GDP and export earning in addition to providing • employment to millions of people across the country. • In 1977 units having investment of less than lakh were • defined as small scale industries while for ancillary units • the investment limit was 15 lakhs and for tiny enterprises • 1 lakh • In 1991 the investment limit for SSI rose to 60 lakh, for • ancillary units up to 75 lakhs for tiny enterprises • 5 lakhs • In 2000, it rose to one crore for SSI ancillary units 1 • crore for tiny enterprises 25 lakh Source: Wikipedia/SSI India

  7. MSMED ACT, 2006

  8. MSMED Act, 2006 • Introduces the concept of ‘enterprise’ as opposed to the earlier concept of industry. • Classifies MSMEs into : • Enterprises engage in the manufacture or • production of goods pertaining to any industry • specified into first schedule of industries in the • Development and Regulation Act, 1951 • Enterprises engaged in providing or rendering services

  9. Micro, Small and Medium Enterprises as per MSMED Act, 2006 • Based on their investment in plant and machinery (for manufacturing • enterprise) and on equipment for enterprises providing or rendering • services.

  10. CONTRIBUTION 36 million units 80 million employment 6000 products MSMEs 45% Manufacturing output 8% GDP 40% Total export Source: Ministry of Micro, Small and Medium Enterprises

  11. NUMBER OF ENTERPRISES Source - Final Report Fourth All India Census of Micro, Small & Medium Enterprises

  12. PRODUCTS Source - Final Report Fourth All India Census of Micro, Small & Medium Enterprises

  13. ROLE OF MSME IN EMPLOYMENT

  14. MSMEs Generates Large-Scale Employment • Contributes about 70 percent of the net new jobs • across the globe • Labour intensity in the MSMEs sector is almost • 4 times higher than the large enterprises • Generates highest employment per Capita • Investment • Checks rural migration by providing sustainable • sources of employment

  15. CONTRIBUTION OF MSMEs IN EMPLOYMENT Source: 1. Fourth All India Census of MSME 2006-07, 2. National Account Statistics (2014), CSO, MoSPI and 3. Annual Survey of Industries, CSO, MoSPI.

  16. ECONOMIC GROWTH AND EXPORTS

  17. Sustains economic growth and increase exports • Non traditional products account for more than • 95 per cent of the SSI exports • Traditional MSEs have potential to expand the • quantum of exports • Ideal for meeting small orders quantities in • industries such as readymade garments, • home furnishing etc • Promote eco friendly growth, especially in • difficultterrains and ecologically sensitive areas

  18. CONTRIBUTION OF MSMEs IN GDP AND OUTPUT Source: 1. Fourth All India Census of MSME 2006-07, 2. National Account Statistics (2014), CSO, MoSPI and 3. Annual Survey of Industries, CSO, MoSPI.

  19. ANNUAL GROWTH RATE ON PRECEDING YEARS Source - Final Report Fourth All India Census of Micro, Small & Medium Enterprises

  20. MSMEs AND INCLUSIVE GROWTH • It is the only source of livelihood for many families • Touches the lives of the most marginalized section • of the society such as women, Muslims, SCs and • STs unskilled labour • Breaks the cycle of poverty and deprivation • It is dominated by different social group • Focuses on people’s skill and agency

  21. MSMEs DIVISION AMONG COMMUNITIES Source - Final Report Fourth All India Census of Micro, Small & Medium Enterprises

  22. MSMEs DIVISION AMONG SOCIAL GROUPS Source - Final Report Fourth All India Census of Micro, Small & Medium Enterprises

  23. GENDER RURAL/URBAN Source - Final Report Fourth All India Census of Micro, Small & Medium Enterprises

  24. CHALLENGES FOR MSME

  25. MSMEs faces tough challenges in the period of Globalization and Liberalization • Rock-Bottom Prices • Infrastructural Bottlenecks • Financial Bottlenecks • Marketing • Technological • Demonetization • Goods and Service Tax (GST) • Other Problems

  26. GOVERNMENT ROLE

  27. ORGANISATION • Khadi& Village Industries Commission (KVIC) • Mahatma Gandhi Institute for Rural Industrialization (MGIRI) • Coir Board • National Small Industries Corporation (NSIC) Ltd • National Institute for Micro, Small and Medium Enterprises

  28. MAJOR PLANS & SCHEMES IMPLEMENTED BY THE MINISTRY

  29. Scheme of fund for Regeneration of Traditional Industries (SFURTI) • Prime Minister’ s Employment Generation Programme (PMEGP) • Marketing Assistance Scheme • Performance & Credit Rating Scheme • Credit Guarantee Scheme (CGTMSE) • International Cooperation (IC) Scheme • Infrastructure Development Program • Technology Upgradation and Quality Certification

  30. RECENT INITIATIVES

  31. ASPIRE: A Scheme for Promoting Innovation and Rural Entrepreneurship • Change of Definition of MSMEs • UdyogAadhaar • Digital Initiatives • Technology Centre System Programes • Quality Management System (ISO)

  32. CONCLUSION

  33. Lack of reliable and stable economic infrastructure, reduce growth of credit inflow and technological obsolescence, together would have let to inferior quality and low productivity are the major obstacles for small industries in India. At the same time government policies changes have thrown open new opportunities and market for the Indian Small industries. • Technological up gradation and in-house technological innovation and promotion of inter-firm linkages needs to be encouraged consistently. • Financial infrastructure needs to be broadened and adequate inflow of credit be insureda technological vibrant, internationally competitive small industry should be encouraged to make a sustainable contribution to national income, employment and exports.

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