SMEs form the backbone of the Indian manufacturing sector and have
become engine of economic growth in India. It is estimated that
SMEs account for almost 90% of industrial units in India and 40% of
value addition in the manufacturing sector. This paper closely
analyses the growth and development of the Indian mall scale sector
from opening of the economy in 1991. Third part looks into the
present scenario of SMEs and the problems they phases like lending,
marketing, licensing issues in detail. The Micro, Small and Medium
Enterprises Act, 2006 is intended to boost the sector. The
provisions of the Act are examined closely. The final part provides
some future policy framework for the sustainability of the sector.
Worldwide, the micro small and medium enterprises (MSMEs) have been
accepted as the engine of economic growth and for promoting
equitable development. The major advantage of the sector is its
employment potential at low capital cost. The labour intensity of
the MSME sector is much higher than that of the large enterprises.
The MSMEs constitute over 90% of total enterprises in most of the
economies and are credited with generating the highest rates of
employment growth and account for a major share of industrial
production and exports.
In India too, the MSMEs play a pivotal role in the overall
industrial economy of the country. In recent years the MSME sector
has consistently registered higher growth rate compared to the
overall industrial sector. With its agility and dynamism, the
sector has shown admirable innovativeness and adaptability to
survive the recent economic downturn and recession.
As per available statistics (4th Census of MSME Sector), this
sector employs an estimated 59.7 million persons spread over 26.1
million enterprises. It is estimated that in terms of value, MSME
sector accounts for about 45% of the manufacturing output and
around 40% of the total export of the country.
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