TABLE OF CONTENTS

SL No. Title Page no

1 Introduction 3-4

2 Micro, Small and Medium enterprise 5-7

in India

3 Growth of MSMEs 8-13

4 MSMEs of past, present and future 14-15

scenarios

5 Export potential of MSMEs 16-17

6 Issues and challenges faced by 17-19

MSMEs

7 A new wave MSMEs 20-21

8 Conclusion 22

9 References 23

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 CONTRIBUTIONS

SL CONTENTS CONTRIBUTIONS
NO:
1 Introduction Rocky Williams

2 MSME sector in India Navya Jayachandran

3 Growth of MSMEs Jabin shihab

4 MSMEs of past, present and future Navya Joy

scenarios

5 Export potential of MSMEs

Issues and challenges faced by
MSMEs
6 The new wave MSME
Conclusion

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 INTRODUCTION

India is expected to emerge as one of the leading economies in the world over
the next decade in the light of a positive political and economic scenario. The
Micro, Small & Medium Enterprises (MSME) segment is expected to play a
significant role in the emergence of the Indian economy. The development of
this segment is extremely critical to meet the national imperatives of financial
inclusion and generation of significant levels of employment across urban,
urban and rural areas across the country. Further, it can nurture and support
development of new age entrepreneurs who have the potential to create globally
competitive businesses from India.
MSME can be the backbone for the existing and future high growth businesses
with both domestic and foreign companies investing in the ‘Make in India’
initiative and make significant impact in the area of indigenisation. ‘Make in
India with zero defect and zero effect’, is a significant opportunity. The new
wave MSME should enable the development of a business eco system that
enables and continuously support business that are gearing to deliver the right
product, the right quality, the right solution and the right service at a
competitive price, both in domestic and international markets. The ‘Digital
India’ revolution also provides a great opportunity to promote MSME
participation in the Information, Communication and Telecommunication (ICT)
sector, in line with the government vision.
It is equally important that the MSME segment develops in all areas of
agriculture, manufacturing and services sectors because each of these sectors
will continue to be very relevant to the overall GDP growth as well as
employment generation. The MSME sector will act as a catalyst to bring about
this socio-economic transformation.
India’s GDP is expected to touch 8.5 per cent, with the country likely to be a
USD 5 trillion economy by 2025. The MSME segment has the potential to
emerge as a backbone for this economy and act as an engine for growth, given
the right set of support and enabling framework. The MSME opportunity is to
develop entrepreneurship and support growth led by innovation over the next
decade by:
Significantly increasing the share of MSME contribution to GDP from the
current 8 per cent to 15 per cent by 2020

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 • Generate employment levels to the extent of 50% of the overall employment,
more than doubling the current MSME workforce of 106 million across
agricultural, manufacturing and services sectors3 ; and
• Increasing the share of MSME contribution across key public and private
industry sectors fulfilling increasing domestic demand, growth in exports,
indigenisation and import substitution.
The Micro, Small and Medium Enterprises Development (MSMED) Act, 2006,
governs the coverage and investment ceiling of MSMEs in India.
According to the Act, there are two categories of MSMEs in the country –
manufacturing and services.
For the manufacturing sector, the definition of an MSME is based on a
company’s capital investment in plant and machinery. The threshold limits are:

 Micro: when investment does not exceed Rs 2.5 million (US$34,040);

 Small: when investment is more than Rs 2.5 million (US$34,040) but

does not exceed Rs 50 million (US$680,875); and
 Medium: when investment is more than Rs 50 million (US$680,875) but
does not exceed Rs 100 million (US$1.3 million).

For the services sector, the definition of an MSME is based on a company’s

investments in equipment. The threshold limits are:

 Micro: When investment does not exceed Rs 1 million (US$13,617);

 Small: When investment is more than Rs 1 million (US$13,617) but

limited to Rs 20 million (US$272,350); and
 Medium: When investment is more than Rs 20 million (US$272,350) but
less than Rs 50 million (US$680,875).

Earlier this year, the union cabinet of India approved the changes in the
classification of MSMEs. According to the revisions

Micro: a unit where the annual turnover does not exceed Rs 50 million
(US$680,875).

Small: a unit where the annual turnover is more than Rs 50 million

(US$680,875) but does not exceed Rs 750 million (US$10.1 million); and
Medium: a unit where the annual turnover is more than Rs 750 million
(US$10.1 million); rupees but does not exceed Rs 2.5 billion (US$33.8 million).
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 MICRO, SMALL AND MEDIUM ENTERPRISES IN INDIA

There are approximately 46 million Micro, Small and Medium Enterprise sector
enterprises across various industries, employing 106 million people. Overall, the
MSME sector accounts for 45 percent of Indian industrial output and 40 percent
of exports. While most of the sector is un-organised (approximately 94 per cent)
, informal and un-registered, initiatives to have more enterprises registered are
well underway.

The contribution of the MSME sector to India’s GDP currently stands at ~8 per
cent for 2011-12, and is growing at a rate higher than the projected GDP growth
rate. The contribution of MSME segment to the GDP in some of the global
economies is in the 25-60 per cent range. MSME in India has the potential to
increase the share of contribution to GDP from the current 8 per cent to about
15 per cent by the year 2020.

Globally the MSME segment development has shown mixed results depending
on various policies and initiatives undertaken by developing and developed
economies during their critical economic lifecycle. Many developed and
developing economies have demonstrated that the MSME segment constitutes
the backbone for maintaining growth rates as well employment generation rate
and provides stability during economic downturns. It is therefore very crucial
that as India embarks on a new wave economy, it adopts an MSME opportunity
framework that will provide the necessary impetus to seize the opportunities
created by:

• Emergence of domestic demand led by significant increases in spending and

consumerism;

• Increase in spending in infrastructure and defence sectors;

• Increase in foreign direct investments in existing and emerging businesses in

India;
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• Foreign companies investing in India for their global market requirements
(Make in India); and

• The double digit growth expected in numerous business sectors.

In order to be globally competitive it will be essential for India’s entrepreneurial

skills to be global in their outlook and adopt innovation, develop world class
technologies and to skill the nation’s favorable age profile of human resources.
India will have to develop stronger support in providing an enabling business
environment. The business environment should aim to enable greater number of
companies to sustain from a startup stage to the next level of growth and
maturity and should nurture these businesses into billion dollar plus enterprises
over the next decade

This can be made possible with a new wave opportunity framework for the new
wave India MSME. Any new framework will have to consider domestic
imperatives, evolution in key business sectors of the economy and evaluate
global MSME policies across developing and developed economies. Further the
framework will have to shift from regulatory compliance approach for
stakeholders, to a performance incentive-based approach. This could channelise
and reward growth and performance in relevant areas, support innovation and
enhance higher productivity.

A catalyst for socio-economic transformation of the country, the sector is

critical in meeting the national objectives of generating employment and
discouraging rural-urban migration. Of the many challenges impeding the
growth and development of MSMEs, limited access to financial resources, lack
of infrastructure support and inadequate linkages to domestic and global
markets, etc. are few of the bottlenecks that make these enterprises vulnerable,
particularly in the period of economic downturn.

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In India, MSME are very large in numbers, diverse in type of business and are
spread across remote geographies of a vast country. A large portion of the
MSMEs are informal and not registered with the formal eco system of MSME.
It will require significant changes in philosophy and approach to be able to
develop and deliver a new wave eco system which facilitates their development
and seize the emerging domestic and global opportunities. At a minimum, any
hindrances and hurdles in doing business are to be removed. This will help
unleash a young and dynamic entrepreneurial talent in India who will be willing
to make self-entrepreneurship the first career choice and develop growth
companies

Seizing the emerging opportunities to develop a robust MSME sector as a

strong backbone for a growing economy will require efforts by the government
to bring the various stakeholders i.e. equity funds, banks and financial
institutions, industry sector majors and MNCs, regulators across various
Ministries at the centre and state level and trade associations and global
economies having trade flows with India and others stakeholders, etc., together
and create a forward looking framework and eco system. Further, a holistic
approach can be considered in developing new wave MSME in view of the
emerging opportunity areas in the India economy. Such an approach will be
necessary to deliver the potential. Further, speedy utilisation of the INR10,000
cr fund for MSME and the INR 200 cr fund for technology upgradation
announced in the recent Union budget can provide an excellent immediate
impetus to the development of MSME. A policy framework can be developed
for a seed fund which can contribute to 25% of the venture and special purpose
private equity funds ranging from INR 100 – 500 Cr and focusing specific areas
- adopting innovation and technology, digital India, global competitiveness and
so on. Relevant authorities and stakeholders can work together to channelize the
funds

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 GROWTH OF MSME’s

Micro, Small and Medium Enterprises (MSMEs) in India keep humming,

generating jobs, absorbing fresh dropouts from farm labour, diversifying the
economic structure. Its contribution is visible in exports as one third part of
India’s national exports comes from this sector as well as 40 percent of the
national output is generated from the manufacturing sector. The numbers of
enterprises established are also massive. This can be depicted from the number
of registered and unregistered units which stood 5.30 lakh in 1980-81 and to
32.25 lakh in 1999-2000, which increased to 361.76 lakh in 2006-07 (Annual
Report, Ministry of MSMEs, 2013-14). The significant role of the sector has
also been observed through high absorption of manpower resource. The sector
employed 238.73 lakh people in the year 2000-01 which rose to 695.38 lakh
people in the year 2009-10, a significant 191 percent growth in employment
generation (Srivastaw & Sadhukhan, 2013). It has constantly achieved a higher
growth rate than the overall industrial growth rate. According to the data
released by ‘Centre for Industrial & Economic Research (CIER)’, the overall
industrial growth rate was 5.70 percent in 2002-03 and 8.56 percent in 2008-09
while in the MSME sector, the growth rate was 8.68 percent in 2002-03 and
13.56 percent in 2008-09. Moreover, the ample varieties of products
manufactured by this sector, makes it an essential part in driving the Indian
economy and fulfilling the diversified needs of the large masses. The production
of the necessary items like garments, footwear, matches, paper, etc. to the most
sophisticated items like electronics, cosmetics, engineering products, etc. make
available to every section of society.

PERFORMANCE OF MSME SECTOR IN INDIA

In India 40% workforce is employed by MSMEs. It makes up for 45% of total

industrial production in India and also contributes to 40% of total exports.
MSMEs are involved in the manufacturing of more than 6,000 products which
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includes traditional as well as high tech items. Many of the MSMEs also pose as
ancillary units to larger industrial units. Thus MSMEs play a key role in the
development of Indian economy but continue to face problems of poor financial
management, inefficient operations. If MSMEs improve themselves in their
shortcomings, they have a huge array of opportunities both in the domestic and
foreign market.

MSMEs outperform GDP and IIP growth rates. MSMEs have outperformed IIP
and GDP growth rates in the past five years. The domestic MSME sector has
outpaced industrial and GDP growth. During FY12, total production of MSMEs
was projected to grow at 11.48% compared to industrial and GDP growth of
8.2% and 8.4% respectively.

In FY11, total production of MSMEs was equivalent to about 14.28% of India’s

GDP (at current market prices). The total production of MSMEs for FY11 was ‘
10,957.6 billion (at 2001-02 prices).Between FY07 and FY11, the sector’s total
production grew at a CAGR of 11.5%, clearly indicating the substantial
contribution of MSMEs to the Indian Economy

Table below shows the number of MSME units’ established since 2000-01. The
growth trend of units established in the sector depicted that the trend is nearly
constant, except the year 2006-07, where growth rate was much higher i.e.
193.12 percent as compare to other years, which stood nearly at 4 percent. This

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is due to the enactment of Micro, Small and Medium Enterprises Development
(MSMED) Act, 2006, in which the definition and coverage of small scale sector
was broadened and two new sectors were included under this sector i.e.
medium sector and service sector.

TABLE-Number of micro, small and medium enterprises in India

Year Number of total MSMEs % increase(+)/ decrease (-)

(in lakh) over previous years#
2000-01 101.1 -
2001-02 105.21 4.07
2002-03 109.49 4.07
2003-04 113.95 4.07
2004-05 118.59 4.07
2005-06 123.42 4.07
2006-07 361.76 193.12
2007-08* 377.36 4.32
2008-09 * 393.70 4.33
2009-10 * 410.80 4.34
2010-11 * 428.73 4.36
2011-12* 447.66 4.42
2012-13* 467.56 4.44
Source: Annual Report of Ministry of MSME for the year 2013-14

EMPLOYMENT OPPORTUNITIES OF MSMEs IN INDIA

With the increase in MSME contribution to the GDP, there is a potential to

increase its contribution to employment to over 50 per cent over the next
decade. It is also vital for the informal MSMEs who are currently not registered
need to be made part of the formal MSMEs eco system. Growth incentives in
the form of privileges and direct benefits for the MSMEs will encourage
registration and participation in the growth opportunity. Typically, MSME
sector can provide comparatively larger employment opportunities at
comparatively lower capital cost especially in the rural and remote areas, by

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becoming part of the industrial ecosystem and act as ancillary units for large
enterprises to support the system in growth.

Table 3.2
EMPLOYMENT GENERATION IN MSMEs IN INDIA
Year Employment % increase(+)/ decrease (-) over
(Lakh persons) previous years
2000-01 238.73 -
2001-02 249.33 4.44
2002-03 260.21 4.36
2003-04 271.42 4.31
2004-05 282.57 4.11
2005-06 294.91 4.37
2006-07 805.23 173.04
2007-08* 842.00 4.57
2008-09* 880.84 4.62
2009-10* 921.79 4.65
2010-11* 965.15 4.70
2011-12* 1011.80 4.83
2012-13* 1061.52 4.91
Source: Annual Report of Ministry of MSME for the year 2013-14
Employment generated by MSME as a percentage of overall employment globally

MSME sector has been recognized as one of the key sector for employment
generation and often termed as ‘labour intensive industries’. MSMEs have the
potential to provide employment to both self employment as well as wage
employment. MSMEs employed 238.73 lakh people in the year 2000- 01 which

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rose to 1061.52 lakh people in the year 2012-13, a significant growth in
employment. If we analyse the growth rate of employment since 2000-01, then
we can say that it was somewhat stagnant at 4-5 percent except the year 2006-
07, where it was 173.04 percent which mainly attributed due to inclusion of
medium and service sector under MSME Act. It is also evident by the graph
that the growth trend of employment is higher than the growth trend of MSMEs
over the years.

INVESTMENT TREND OF MSMEs IN INDIA:

Year by year the investment in MSME sector has increased from Rs 146845
crore in 2000-01 to Rs 1269338.02 crore in 2012-13. But the growth rate of
investments throughout these years was fluctuating. The highest increase in the
investment can be seen in the year 2006-07, i.e. of about 361.72 percent which
is due to the inclusion of service and medium sector. The table shows that the
compound annual growth rate of investment in the last ten years was 18.05
percent per year. Before the year 2006-07, the investment was low around 4-5

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percent but after that it increased to around 6-7 percent growth of investment
each year.

After analysing the trend of MSMEs in India on the basis of employment,

investment and units established from 2000-01 to 2012-2013 from the tables
(3.1, 3.2, and 3.3) and figures (3.1 and 3.2), we can clearly say that the growth
trend is approximately the same except for the year 2006-07, which shows huge
increase in growth percentage. The core reason behind this is that the MSME
Act was formed in the year 2006, in which two major sectors, service sector and
medium sector were included, which expanded the ambit of small scale
industries.

TREND OF INVESTMENT IN MSMEs IN INDIA

Year Fixed Investment % increase(+)/ decrease (-) over

(Rs. Crores) previous years
2000-01 146845 -
2001-02 154389 5.14
2002-03 162317 5.14
2003-04 170219 4.87
2004-05 178699 4.98
2005-06 188113 5.27
2006-07 868543.79 361.72
2007-08* 920459.84 5.98
2008-09* 977114.72 6.16
2009-10* 1038546.08 6.28
2010-11* 1105934.09 6.48
2011-12* 1183332.00 7.00
2012-13* 1269338.02 7.26
CAGR 18.05%

MSMES OF PAST, PRESENT AND FUTURE SCENARIO

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Past Scenario

Small industry in India has been confronted with an increasingly competitive

environment due to:

(1) Liberalization of the investment regime in the 1990s, favoring

foreign direct investment (FDI);

(2) The formation of the World Trade Organization (WTO) in 1995,

forcing its member countries (including India) to drastically scale down
quantitative and non-quantitative restrictions on imports,

(3) Domestic economic reforms. The cumulative impact of all these

developments is a remarkable transformation of the economic environment
in which small industry operates, implying that the sector has no option but
to ‘compete or perish.

Present Scenario

SME sector of India is considered as the backbone of economy contributing to

45% of the industrial output, 40% of India’s exports, employing 60 million
people, create 1.3 million jobs every year and produce more than 8000 quality
products for the Indian and international markets. With approximately 30
million SMEs in India, 12 million people expected to join the workforce in next
3 years and the sector growing at a rate of 8% per year, Government of India is
taking different measures so as to increase their competitiveness in the
international market. The Indian market is growing rapidly and Indian industry
is making remarkable progress in various Industries like Manufacturing,
Precision Engineering, Food Processing, Pharmaceuticals, Textile & Garments,
Retail, IT, Agro and Service sectors. SMEs are finding increasing opportunities
to enhance their business activities in core sectors.

Following are some of the current figures related to the SME sector in India:

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• The contribution of the SME sector to the entire output of the country is
40%.
• Currently, there are over 11 million SME units in India that produces
more than 8000 products.
• 90% of the Industrial Units in India belong to the SME sector.
• These SME units contribute 35% to the Indian Industrial Export.
Following are some of the factors that have contributed to the growth of SME
sector in India.

• SME units in India are being funded by foreign and local fund providers
the advancement in technology has also contributed highly to the SME sector.
• There are numerous business directories and trade portals available online
that contains a rich database of manufacturers, sellers and buyers.
• To start and maintain these units, minimal investment is required.
• These SME units are now being funded by many government and private
banks.
The SME sector is one of the greatest contributors of domestic production as
well as the export earnings. Many major mergers have taken place recently.

Future Scenario

Government of India is taking different measures so as to increase their

competitiveness in the international market. There are several factors that have
contributed towards the growth of Indian SMEs. Few of these include;

• Funding of SMEs by local and foreign investors,

• The new technology that is used in the market is assisting SMEs add
considerable value to their business,
• Various trade directories and trade portals help facilitate trade between
buyer and supplier and thus reducing the barrier to trade.

EXPORT POTENTIAL OF MSMEs

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The contribution of the services, manufacturing and agricultural to the overall
exports from India is fairly skewed. While export of services led by IT and ITeS
sectors have grown significantly in the last decade, the contribution to exports
from manufacturing output has been largely stagnant. India’s share of services
exports in world exports of services was 3.3 per cent in 2011 and has been
increasing faster than the share of Indian merchandise exports in world exports.
During 2012-13, Indian merchandise exports showed a slight negative growth
rate of around 2 per cent as compared to a positive growth of 21.9 per cent
during the financial year 2011-12

The share of MSMEs in India’s total exports was estimated to be around 40

percent in 2011-1223. The share of the top four commodities account for about
60 per cent of total MSME exports. While globalisation presented a number of
challenges for the manufacturing MSMEs, it also opened up ample
opportunities to shore up the growth of the manufacturing sector. India can
seize the opportunities provided by the dynamics of globalisation which has
resulted in a dramatic shift of manufacturing to developing countries over the
last decade. India can significantly diversify its export portfolio, both in terms
of products and goods exported as well as regional coverage.

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Product wise share of exports for MSME sector -

A quick look at the share of key products exported indicates that there is
considerable scope to diversify current portfolio. There is immense potential for
export of goods such as fine chemicals, engineered products, plastic, processed /
packaged food etc. where MSME can play a crucial role. Even in terms of
regions, geographies like Latin America, Eastern Europe and Africa are largely
untapped, especially in the MSME sector. These regions typically comprise of
emerging economies and offer significant consumer base which can be milked.

Issues and Challenges faced by MSMEs

Despite the pivotal role and strategic importance in the context of industrial
development and economic growth of the country, the MSME sector
experiences several constraints and challenges. Several key issues remain to be
addressed properly and measures yet to be taken in the interest of sustainable
industrial development. The Committee on financial architecture of MSME
sector in their Report submitted in the February, 2015 have identified some key
issues. These include; i)Equity as a source of financing is underutilized and the

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prevalence of investment by venture capital and angel investors is low, ii)
MSMEs face the problem of delayed payments from their buyers which
adversely impacts their working capital as well as their next cycle of
production, iii) MSMEs lack adequate information about various schemes and
benefits available by the government, iv) Financial institutions/Banks face
challenges in credit risk assessment of MSMEs, v) The utilization of the
available credit guarantee and insurance schemes by banks has been low

Some of the major challenges confronted by these enterprises include; lack of

adequate credit and capital, poor and inadequate infrastructural facilities,
inadequate access and marketing linkages, technological obsolescence and
inadequate application of new technology, lack of skilled human
resources,dilatory and cumbersome regulatory practices for clearance and poor
adaptability to emerging international trends. This calls for the need for strategic
intervention to improve coordination and linkages between various stake-
holders including the Government, industries and other agencies/associations
working in this field

i. Lack of Adequate Capital and Credit :

One of the greatest challenges which constrain the growth of MSMEs in our
country relates to inadequate capital and credit facilities. Easy and timely access
to credit is crucial factor to development and growth of enterprises. The Report
of the Working Group on Rehabilitation of sick MSMEs by the Reserve Bank
of India has identified this situation as a crucial reason for industrial sickness of
this sector. Complex collaterals instead by the banks, cumbersome sanction
procedures and delay in disbursement and high rate of interest on term loans
further worsen the situation

ii. Poor and Inadequate Infrastructural Facilities:

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Deficiencies in the infrastructure and poor support facilities marked by
inadequate access to basic facilities like water, power supply, road/rail
connectivity etc. adversely affect this sector and contribute to enhance their
operational cost by rendering the MSMEs less competitive in the challenging
market situations.

iii. Inadequate Access and Marketing Linkages:

Poor marketing linkages characterized by inadequate Government support and

patronage, lack of adequate marketing infrastructure/ network facilities continue
to be a greater challenge for marketing and sale of MSME products. In a non-
cluster situation, these enterprises get segregated and are unable to ensure
reduction in procurement cost from big companies and fail to streamline the
output-supply chain.

iv. Lack of Skilled Human Resources:

Non-availability of skilled workforce and better managerial/entrepreneurial

expertise at affordable cost near the location of enterprises is another such big
challenge for the MSMEs in our country. Lack of managerial competence,
absence of proper training on resource planning and capital management etc.
hinders the growth of enterprises.

v. Lack of Access to New Technology:

Most of the industries today require application of advanced technology in their

operations whereas in the Indian context continuance of low technology base
results in low productivity by making these enterprises uncompetitive in the
ever-widening market contexts. Apart from enhancing productivity and quality,
new technology should be adopted for an overall transformation and
competitive edge.

vi. Dilatory and Cumbersome Regulatory Practices :

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Cumbersome and dilatory regulatory clearances relating to sanction and
disbursement of loans from commercial banks, collateral securities/guarantees,
for construction permits, resolving insolvency and taxation etc. continue to be
the constraining factors for many MSMEs. Absence of a common regulatory
body and inadequate provisions for start-ups affect the growth of such
enterprises. Nonadherence to RBI guidelines regarding revival/rehabilitation of
seek enterprises by the Banks is another such constraint that needs to be
addressed.

A NEW WAVE MSME

Promoting a culture of innovation and entrepreneurship

As an emerging investment destination of foreign capital, technology and

products, there is a strong need for an innovation strategy to give a competitive
edge to the domestic industries and help them compete in the global
marketplace. Also, with the rising inequality in Indian society due to skewed
availability of opportunities and resources, promoting innovation will help
complement the inclusive growth fundamental.

From the perspective of employment generation as well, creating a suitable

business environment to nurture and promote entrepreneurship is critical for
large scale employment creation. Typically, entrepreneurship tends to be
innovation-driven and can also help generate solutions to India’s myriad social
and economic problems such as skill development, affordable health care,

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energy dependence, urbanisation, waste management, and financial inclusion.
Entrepreneurship-led economic growth is more robust and inclusive

Skills development: MSME largely comprise first-generation entrepreneurs

and the managerial competence require mentoring and support mechanism.

Business environment to support and nurture startups: India needs an

entrepreneurial ecosystem that encourages innovative startups. Risk taking
should be encouraged and entrepreneurs should be supported to overcome
roadblocks

Global competitiveness and access to technology: India should create an

environment for MSME joint ventures to enable Indian MSMEs to partner with
their global businesses and evolve to global levels on innovation, adapting to
new technologies and attention to quality.

Women entrepreneurship

Women entrepreneurs make a significant contribution to the Indian economy

and should be encouraged to participate in the MSME growth story. There are
nearly three million MSME’s with full or partial female ownership.
Collectively, these women-owned enterprises contribute 3.09 percent of
industrial output and employ over 8 million people. Approximately, 78 percent
of women enterprises belong to the services sector. Women entrepreneurship is
largely skewed towards smaller sized firms, as almost 98 percent of women-
owned businesses are currently micro-enterprises

Focus on Technology

Technology is increasingly seen as business enabler and a vital tool for bringing
in process efficiencies and higher degree of standardisation. In order for
MSMEs to develop a competitive advantage to operate in the global market, a

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strong focus on implementing new age technology, developing indigenous
technology as well as technology collaboration with global partners is likely to
play a crucial role. Technology plays a pivotal role for MSME to help them
stand up to the stiff competition from large enterprises and imports. A strong
technology-enabled sector levels the playing field, to a great extent, between
MSMEs and their established counterparts globally.

With respect to developing indigenous technology, across sectors like IT,

Electronics, Manufacturing, Pharmaceuticals and Biotechnology, various
industry stakeholders, industry bodies and associations, academia, government
and large enterprises – need to come together to help pull MSME one notch up
in the value chain and lead them to focus on innovation and automation.

CONCLUSION

MSMEs over the years have assumed greater significance in our burgeoning
national economy by contributing to employment generation and rural
industrialization. This sector possesses enough potential and possibilities to
push-button accelerated industrial growth in our developing economy and well
poised to support national programme like ‘Make in India’. This sector has
exhibited enough resilience to sustain itself on the strength of our traditional
skills and expertise and by infusion of new technologies, capital and innovative
marketing strategies. Appropriate strategies should be evolved for creation of an
enabling ecosystem where these enterprises are able to access the benefits
meant for themselves under a formal and friendly ecosystem and are further
capable of meeting the emerging challenges of a globally competitive order.

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REFERENCES

 Enterprises with UdyogAadhaar Number. (n.d.). Retrieved December 22,

2015, from http://udyogaadhaar.gov.in/UA/
Reports/StateBasedReport_R3.aspx.

 MSME Overview: (n.d.). Retrieved December 22, 2015, from

http://dcmsme.gov.in/ssiindia/MSME_OVERVIEW09.pdf.

 MSME: Govt. of India Development Commissioner (MSME) Ministry of

Micro, Small & Medium Enterprises. (n.d.). Retrieved December 22, 2015,
from http://www.dcmsme.gov.in/ howtosetup/getstart.htm.

 MSME: Ministry of Micro, Small & Medium Enterprises (AN ISO

9001:2008 CERTIFIED ORGANISATION). (n.d.). Retrieved December 22,
2015, from http://msme.gov.in/mob/home.aspx

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