Micro, Small & Medium Enterprises (MSMEs) Finance – Profitable Business for Banks: Its Ways & Drivers
Journal Title: International Journal of Physical and Social Sciences (IJPSS) - Year 2011, Vol 1, Issue 1
Abstract
The Indian industrial economy is characterized by a dynamic and versatile set of enterprise actors, who are prestigiously known as Micro, Small and Medium enterprises (MSMEs) for their scale of operations. This category has been leading a typical competitive advantage to Indian industry in terms of controlling sufficient markets globally. It is because of their ability to make available low-volume customized products, flexible response and lower fixed overhead costs. The other unique behavior of these MSMEs is that in most of the cases depending upon their specialization, they have evolved as clusters. The importance of MSMEs as compared to Corporate Enterprises with regard to their contribution towards Indian economy can be best understood that they contribute 8% in Gross Domestic Product (GDP), 45% of manufactured output, 40% of exports, manufacture over 6000 products and provide employment to around 60 million person through 26 million enterprises as per quick estimates of 4th all India census of MSMEs completed during 2009-101. MSE sector has maintained a higher growth rate of Index of Industrial Production (IIP) in two digit figure at 12.60% & 13.00% in 2007 & 20082 respectively vis-à-vis overall industrial growth of the sector at 11.5% & 8% in 2007 & 2008 respectively. Recognizing the significant contribution of this sector in economic growth and also in employment generation in our country, erstwhile definition of „Small Scale Industries‟ has been revised with inclusion of services & trading activities in the ambit of MSME by enactment of Micro, Small & Medium Enterprises Development (MSMED) Act from 2nd October 2006. Also the Act recognizes the term „Enterprises‟ instead of „Industry‟ to include service in MSME segment.
Authors and Affiliations
Dr. Ram Jass Yadav
Keywords
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