Micro, Small and Medium Enterprises (MSMEs) in India: An Engine of Employment and Economic Growth

Abstract

The present study attempts to examine the performance of MSME sector in generating employment and to highlight the contribution of MSME sector to the total industrial production and gross domestic product. The results of the study show that the number of the person employed in MSME sector has increased more than five times in a time span of twelve years from 2001-02 to 2012-13. While the value of manufacturing output of this sector has increased, the contribution of this sector to the total industrial production and Gross Domestic Product (GDP) has marginally declined. This justifies the need for MSME sector to improve its productivity. The government-supporting measures and policies, should promote MSMEs by helping them to increase their efficiency and competitiveness within a market driven economy. Undoubtedly, the MSME sector has enormous potential and is a crucial aspect of the Indian economy. However, it is essential on the part of the government to take careful decisions and honest policy implementation to overcome the problems of MSME sector.