Micro, Small and Medium Enterprises in India are not progressing satisfactorily due to various challenges. In this context, discuss the various challenges and opportunities of MSME sector.
- Introduce with significance of MSMEs
- Highlight the challenges faced by the sector
- Highlight the opportunities
- Conclude appropriately
Micro, Small and Medium Enterprises (MSMEs) play a vital role for the growth of Indian economy by contributing 45% of industrial output, 40% of exports, employing 40 percent of India’s workforce and producing more than 8000 quality products for the Indian and international markets. Despite of the importance of the MSMEs in Indian economic growth, the sector is facing challenges.
- Absence of adequate and timely banking finance
- Limited capital and knowledge
- Non-availability of suitable technology
- Low production capacity
- Ineffective marketing strategy and absence of proper market linkages
- Constraints on modernisation & expansions
- Non availability of skilled labour at affordable cost
- Follow up with various government agencies to resolve problems due to lack of man power and knowledge etc.
It also presents various opportunities:
- Less Capital Intensive: With its less capital intensive and high labour absorption nature, MSME sector can make significant contribution to employment generation and also to rural industrialization.
- Employment Generating Sector: The sector has huge employment potential.
- Effective Tool for the Removal of Regional Disparity: MSME sector can take care of local needs, improve economic condition of the area and most importantly, can bring a qualitative change in the economy of the country.
- Export Contribution: Its contribution towards export is 40 percent.
- Equitable Distribution of Income
SMEs are now exposed to greater opportunities than ever for expansion and diversification across the sectors. It is very important to empower the MSME sector to utilize the limited resources (human & economic) they have in an optimum manner. The SMEs need to be educated and informed of the latest developments taking place globally and be helped to acquire skills necessary to keep pace with the global developments.
Subjects : Yojna summary