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Msme: Mechanism For Growth

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Abstract

MSME is a “Mechanism for Growth”. MSME sector is growing at a higher pace. This sector contributes terrifically to the socio-economic development of the country. The present paper is an attempt to analyze the significant role of the youth in MSME. MSME is performing remarkable tasks for the upliftment of the youth and the upgradation of the technology in its working. The objective of this paper is to visualize and give a new dimension to the Ministry of MSME. MSME has adaptability that is the quality to adjust with the changing environment. MSME is a new wave for the Indian Economyand has appeared to be determined and a powerful sector.

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Introduction

India is the second most populous country in the world ranking after china and has world’s largest working population. Young population, the youth of India are the innovators, builders, creators, thinkers and the leaders of the future. Only with these qualitiesthey won’t be leading to a better future for this they require proper skills, health and decision makingnot only for their future but also for the country. For developing these qualities and for opening a new way for the world’s largest working population MSME was introduced. MSME not only provide large employment opportunities at a lower capital cost but also contribute in rural and backward development and in removing the regional disparities.

MSME can be classified as per the following two heads:

  1. Manufacturing Enterprises
  2. Service Enterprises

In common parlance, Manufacturing enterprises are those which invest in plant and machinery and as per these the MSME’s can be categorized as:

  1. Micro Enterprises: The investment for these enterprises does not exceed Rs.25 lakhs.
  2. Small Enterprises: The investment for these enterprises is more than Rs.25 lakhs and less than Rs.5 crore.
  3. Medium Enterprises: The investment for these enterprises is more than Rs.5 crore but less than Rs.10 crore.

In common parlance, Service enterprises are those which invest in equipments and as per this MSME’s can be categorized as:

  1. Micro Enterprises: The investment for these enterprises does not exceed Rs.10 lakhs.
  2. Small Enterprises: The investment for these enterprises is more than Rs.10 lakhs but less than Rs.2 crore.
  3. Medium Enterprises: The investment for these enterprises is more than Rs.2 crore but less than Rs.5 crore.

In the same stream Mr. Giriraj Singh launched the MSME Delayed payment portal with the help of which the delayed payment cases by MSME can get registered so that the MSME would get its money back on time.

Further in terms of workforce Micro and Smallsector will always run notwithstanding the ups and downs.

Review of Literature

  1. Srinivas, K. T. (2013). Role of micro, small andmedium enterprises in inclusive growth.International Journal of Engineering and Management Research,3(4), 57-61;The paper analyzed the performance of the micro, small and medium enterprises and also the contribution made by them in India’s economic growth and development and it concluded that MSME’s play a significant role in inclusive growth of the Indian Economy.
  2. Shankar De, (2009) Financing SME’s in INDIA, IBS Insight, Pg.11;The Article consists about all the major and minor challenges faced by MSME’s and concluded that the most difficult challenge is of financing both short term as well as long term.
  3. Pankaj Kumar, Associate Professor, Economics, Institute of Technology & Science, Ghaziabad Volume: 10 issue: 4, page(s):367-375 Article first published online: December 1, 2014; Issue published: December 1, 2014; The article discusses the performance of micro, small and medium enterprises (MSME) during the pre-liberalization and post-liberalization periods. The sector has faced a number of enactments and amendments in the policies and programmes between the first Industrial Policy and Micro, Small and Medium Enterprises Development Act for better performance. It has acquired a respectable place in the socio-economic contribution of India even after various shortcomings in the policy proposal, poor infrastructure, inadequate training, deficient credit facility, higher sickness rate and so forth.
  4. Bhavani, T.A. (2011), “ Dynamic Business Environments: What These Mean for Indian Small Enterprises” in “Micro and Small Enterprises in India: Era of Reforms: Keshab Das (Ed)” pp. 27-45;The paper is about the employment generations by MSME’s which may be high in number but are low in quality. Importance of technological upgradation, skill development and quality employment is also discussed.
  5. Ravulaparthy Ramarao Competitiveness of India’s Micro and Small Enterprises through Functional Competencies: Role in Nation’s Development vikalpa • volume 37 • no 1 • january – march 2012; This study has revealed the potential of the role of MSEs in developed as well as developing countries, as an engine for providing employment, inclusive growth, exports, and innovation. Thecontribution of this sector to the economy is dependent upon the competitiveness and sustainability of the firms in the MSE sector. In this respect, MSEs have a distinct disadvantage as compared to the large industries.

Objectives

The main objectives of the study onMSMEs: “A New Wave for the Indian Economy”are:

  1. Availability of the employment to the youth both skilled and unskilled.
  2. Skill development initiated by MSME’s.
  3. Training facilities available for the youth by MSME’s.

Methodology

This paper is a conceptual research paper to conceptualize the Indian economy in terms of MSME. The data has been collected from various secondary sources in reference to MSME.

Analysis – Key Aspects of MSME’s

  1. The major job givers and stimulators for growth are the MSME’s.
  2. Sustainable development goals are critically undertaken by MSME’s.
  3. Amongst the five new formal jobs four are created in the visible markets of MSME’s.
  4. MSME’s go with the fact that young people show higher levels of businessman leadership than adult do.

Youth and Employment Challenge

  1. Worldwide there are over 66 million youth which is unemployed and around 145 million young workers are living in poverty.
  2. Unemployability in youth is the times than that of adults.
  3. Incompatability in skills and labour market requirements leads to problems in securing a job by youth.

Employment Opportunities

MSME lead to the increase I thee contribution to GDP of the country and so with its potential it would also be contributing to employ to over 50 percent over the next decade. The unofficial MSME that is which are not registered must be made part of the official MSME’s that are registered.MSME sector is providing comparatively larger employment opportunities at a lower capital cost mainly in the rural areas will act as a support system in the growth of the country. India needs to create 10 to 15 million job opportunities per year over the next decade to provide gainful employment to its capable population. The mission will help in generating employment for the youth in rural areas as well as support the country in the development of the green economy.

Apex Training Organizations

The Ministry of MSME is dedicated towards guiding the youth to be employable. The apex organizations working for the same are National small industries corporation (NSIC), National institute for MSME’s (NI-MSME), Central tool room (CTR) are responsible for their contribution towards youth training.

National small industries corporation- NSIC is working under MSMEE and is a public sector enterprise. It is functioning with a purpose of encouraging, nurturing and stimulating the growth of Micro, small and medium enterprises in the country. It renders various support services.

National institute for MSME’s- NI-MSME is the primary institute for the advancement, development and improvement of the MSME sector. It performs a number of operations like training consultancy, research and education etc.

Central tool room – CTR-Ludhiana is setup under an agreement between government of India and government of Germany in 1980.It is working under MSME and is controlled by it.Tool development, rapid prototyping, heat treatment and training are its basic services.

Skill Development

The call for “Skill India Mission” by the honorable Prime Minister lead to the formation of Ministry of MSME which is providing training to eight to nine lakh of persons per year to enable them to create new enterprises or become job ready for industries.

India has the power to become global supplier of quality manpower and so with this the ministry of MSME has given top priority to skill development.MSME’s sector growth is affected due the lack of skilled manpower and information as well as lack of reach to modern technologies.The Ministry of MSME conducts a large number of short term as well as long term courses to train unemployed youth for self employment, to provide necessary and quality skills to the youth to make them eligible for the employment and also to increase the level of skills of the existing workers and entrepreneurs of MSME sector.Through MSME both educated and uneducated are provided skills to be a good small scale entrepreneur.

The youth in Jammu & Kashmir-Rajouri claimed that the MSME schemes made them skilled craftsmen by the loan provided under this scheme. Jammu & Kashmir-Rajouri, the youth in the far flung area are availing the self employment opportunities offered to them by MSME.The youth along the border area are indulged in manufacturing number of iron equipments.

Skill Development is only one side of a coin finding the right employment for the skilled youth is another.

Not only the quantity of skilled manpower but the quality of skilled manpower is necessary for the gainful results.

Statistical Analysis – Role ofMSMEs inthe Indian Economy

TheMSMEs through the business innovations have been contributing crucially towards the expansion of entrepreneurship. MSMEs are providing a wide range of products and services to meet the domestic and global markets. According to the data available thee contribution of the MSME sector in country’s Gross Value Added and Gross Domestic Product at Current Pricefor the past years is as below:

Contribution of MSMES in Country’s Economy at Current Price

As per the data above,the contribution of manufacturing MSMEs has remained consistent at one third for the past few years in the country’s total manufacturing GVO (Gross Value of Output) at Current price.

State-wise Diffusion of MSMES

MSMES are scattered all around India over the different states.The schedule and graphical representation of the distribution of MSMEs in different states is available below:

State-wise Distribution of Enterprises

Distribution of MSMEs in Top Ten States

Uttar Pradesh is a state having the largest number of estimated MSMEs with a share of 14.20% of MSMEs in the country.West Bengal with the nearest share of 14% is next. Tamil Nadu is little behind with 8% of share.The Top Ten States together have a portion of 74.05% of the total estimated MSMEs in the country.

Rewards of MSME

  1. Employment portal has been introduced with the objective to match job providers and job seekers setup by the Entrepreneurs Development Institute (NIESBUD)
  2. Talent Mela are organized to promote entrepreneurship among the youth. It provides a platform where job seekers havea opportunity to work with MSME’s.
  3. Ministry is working for skill training programmes to ensure employability and placement for the youth with various small as well as long term training courses which would lead to skill formation.

Complications forMSME’s

  • High interest rates, the rising cost of raw material and labor are the key input challenges.
  • Tough competition, compression of demand is another challenge as MSME steps out to the market.
  • Value of obsolete technology must be reduced and further be removed.
  • Conclusion

    In the list of priorities of the government; the topmost is to stimulate the youth to be a speculator and start a new business as the country has its focus on the growth and self reliance by overcoming all the uncertainties.

    MSME will leave no space between the talented youth and the enterprises requiring trained manpower.

    If the skills of the talented youth are not utilized properly then it is worthless.

    So, MSME focuses on utilization of skills and resources available to the optimum state.

    MSME is not the whole solution still a steps towards the improvement.

    Suggestions

    1. The government and financial institutions can together take steps to improve the potentiallyviable sick MSME units.
    2. The government must take steps to upgrade the technology in those areas of MSME where they lack such resources.
    3. Certain steps must be taken by the government to make aware the youth and entrepreneurs regarding the schemes available.

    Disclaimer: This essay has been submitted by a student. This is not an example of the work written by our professional essay writers. You can order our professional work here.

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