Micro, Small and Medium Enterprises

Micro, Small and Medium Enterprises (MSMEs) have been recognised as one of the most important sectors for the development of any economy all over the world. This sector constitutes more than 80% of all business organisations all over the world. In India too, its share is more than 90 %. This sector ensures that the processes of economic growth in our country are inclusive, employment-friendly and they contribute to greater regional balance in levels of development.

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During the last decade alone, the MSME sector has progressed from the production of simple consumer goods to the manufacture of many sophisticated products like T.V. Sets, micro-ware components, electro-medical equipment etc. Product range varies from simple items produced with traditional technology to high-tech products, produced with sophisticated state of the art technology.

Other than this, the micro, tiny and small scale sector have been engaged in the production of goods like wood products, hosiery and garments, cotton textiles, beverages and tobacco products, food products, jute textile, leather & leather products, transport equipments etc. These industries produce over 7500 commodities.

Understanding the importance of this sector the government has brought about the enactment of the Micro, Small and Medium Enterprises Development Act. To strengthen this important sector and to create more national awareness about its growing importance in our national economic life government has also introduced comprehensive Package for Promotion of Micro and Small Enterprises a National Commission for Enterprises in the Unorganized Sector have been set up. The contribution of MSME towards inclusive growth compromises a greater percentage.

Inclusive Growth ‘India’ is the new global buzzword. The economy growing at a phenomenal rate, combined with a flourishing democracy is making people sit up and take notice across the world. India’s post 1990’s economic growth has made it one of the world’s fastest growing economies in the world. Their GDP growth rate of up to about 9% in the last few years is historically unparalleled except by the neighboring China. With the rapid growth rates, however, come new challenges and new questions.

One such challenging question concerns the spread of the benefits of growth across different segments of society. To ensure that growth has been well distributed, India’s Planning Commission has made “Inclusive Growth” their explicit goal in the eleventh five-year plan. The 11th Plan defines inclusive growth to be “a growth process which yields broad-based benefits and ensures equality of opportunity for all”. The Inclusive growth implies an equitable allocation of resources with benefits accruing to every section of society, which is a Utopian concept.

Utopia it is because it dreams of an ideal state which we all strive towards. Inclusive growth is broad- based. It is concerned with the Pro-poor growth, growth with equity. Inclusive growth is aimed at poverty reduction, human development, health and providing opportunity to work and be creative. The allocation of resources must be focused on the indented short and long terms benefits and economic linkages at large and not just equitable mathematically on some regional and population criteria.