Indian MSMEs contribution is highly remarkable in the overall industrial economy of the country. In recent years the MSME sector has consistently registered higher growth rate compared to the overall industrial sector. With its agility and dynamism, the sector has shown admirable innovativeness and adaptability to survive the recent economic downturn and recession. In the Indian market, MSMEs rapid growth could be seen as Indian entrepreneurs are making remarkable progress in various Industries like Manufacturing, Precision Engineering Design, Food Processing, Pharmaceutical, Textile & Garments, Retail, IT and ITES, Agro and Service sector. The sector not only serves for the urban market but also helps in the industrialization of rural and backward areas, reducing regional Imbalances and assuring more equitable distribution of national income and wealth. MSMEs complement large industries as ancillary units and contribute enormously to the socioeconomic development of the country. The significance of MSMEs is attributable to their caliber for employment generation, low capital and technology requirement, promotion of industrial development in rural areas, use of traditional or inherited skill, use of local resources, mobilization of resources and exportability of products. The sector generates around 100 million jobs through over 46 million units situated throughout the geographical expanse of the country. With 38% contribution to the nation’s GDP and 40% and 45% share of the overall exports and manufacturing output, respectively, it is easy to comprehend the salience of the role they play in the social and economic restructuring of India. Micro, Small and Medium Enterprises (MSMEs) are the backbone of the Indian economy and the engine of growth and employment. While it put the infrastructure sector under the spotlight by promising to pump in additional funds, it also gave the IT and technology sectors a major push with Rs 1,000-crore fund for self-employment and talent utilization. It has been encouraging for MSMEs in general and entrepreneurship in particular. In India, the MSME sector is capable of growing at a healthy double-digit rate, providing the necessary impetus for our national GDP to achieve high single-digit growth in the next 2 years. The initiative will also lay down the norms for responsible financing practices for microfinance institutions so that the small businesses do not face hardship over-indebtedness while getting a fair environment for repayment. India’s small entrepreneurs were used to exploitation at the hands of money lenders so far, but MUDRA would instill new confidence in them. Small businesses in India are a major source of employment, providing jobs to nearly 120 million people. If given proper access to funding and a chance to expand, they can create more job opportunities that will translate into more people having a regular income and contributing to India’s domestic consumption and growth. Not to mention, increased revenues for the government in the form of taxes from businesses as well as employees.
Keyword: MFI’s, MSME’s, MUDRA,PMJDY & TReDS
Dr. J. Venkatesh
Ms. R. Lavanya Kumari