MSMEs (Medium, Small and Micro Enterprises) have always been the backbone of the Indian economy. They have played a great role in ensuring socialistic goals like income equality, employment generation, poverty eradication, and balanced regional development. MSME’s occupy strategic importance in terms of output, export, and employment created in the Indian economy:
The most important contribution of MSMEs in India is promoting balanced economic development. While large enterprises largely created the Islands of Prosperity in poor India, small enterprises have succeeded in fulfilling the socialistic objectives of providing balanced and equitable growth.
It has helped in the industrialization of rural and backward areas, thereby reducing regional imbalances, assuring a more equitable distribution of national income. Some industries also help large industries by supplying them with ancillary products. Modern products account for more than 95% of MSME exports.
The contribution of MSMEs in the country’s total manufacturing gross value of output has also remained at about 33% during the last 5 years. As per NSS 73rd round (2015-16), it has created 11.1 crore jobs in the country. With the scanty investment in comparison to the large-scale industries, MSMEs provide employment opportunities at low cost. They also go a long way in checking rural-urban migration.
The MSME sector has grown significantly since the 1960s. The annual growth rate has been 4.4% for the number of units and 4.62% in employment. MSMEs are boon for many of the fresh manpower. MSMEs are also making more inclusive growth which touched upon the lives of the most vulnerable and marginalized. This sector seeks to empower people to break the cycle of poverty and deprivation. Socially backward groups owned 66.27% of MSMEs.
They are also important for India in achieving the SDGs like ending poverty (SDG 1), zero hunger (SDG 2), promoting inclusive and sustainable growth, employment and decent work (SDG 8). The sector has sustained an annual growth rate of 10% for the past few years.
MSMEs have been one of the worst affected sectors in the current pandemic. The Lockdown has led to serious problems in this sector. Lack of capital, loss of jobs, fall in demand being some of them. The government took a step in the right direction by announcing a massive 3 lakh crore collateral-free assistance to the MSMEs under the Atma Nirbhar Bharat Abhiyan.
In conclusion, it can be said that while in a country like India, the government alone cannot fulfil the employment opportunities, individuals need to come forward to help themselves and take advantage of the viable business atmosphere created by the government. MSME sector, as the engine of growth for India, will be the vehicle of development in the country once the pandemic is brought under control.