Building a strong industrial sector is always on top of the agenda for policy makers and those governing the country. Industries not only provide goods for internal consumption and exports but also have highest role in offering employment to the youth of the country. While the big industries like iron & steel, cars, electronic items, etc are in focus while discussing GDP and economic growth, there is a Small Industrial Sector that plays an important role in both manufacturing products and employment generation but is hidden from view of economists and policy makers. This is the Micro, Medium and Small Industries Sector.
In India, the MSME sector employs nearly 11 crore people and contributes to around 17 percentage of the GDP. Products ranging from the khadi kurta one wears for occasions, cottage products like honey and coir to the many ancillary items used in industrial production, are all manufactured in this sector. The sector, however, faces many challenges like timely access to credit, lack of infrastructure, inability to resource technology for upgradation as also skilled manpower, access to marketing facilities, etc. The sector also faces competition from neighbouring countries, notably China, whose ‘dumping’ of products has resulted in loss for many indigenous units.
Getting adequate funds is a problem for the units in the Small and Medium Sector mostly because funding agencies are not sufficiently convinced about the viability of these units. In order to address this concern the government has augmented coverage of the sector under the Credit Guarantee Fund Scheme with limit of loan being doubled from Rs 1 crore to Rs 2 crores....
Good infrastructural facilities are necessary for any enterprise to run its operations successfully. Most MSMEs however work with very minimal infrastructural facilities. The Cluster Development Programme of the government aims to create assets like Common Facility Centres to access latest tools, technology, designs, etc. ...
Micro, Small and Medium Enterprises have a strategic role to play in the economy of every country. They help to generate employment in the unskilled, semi-skilled and skilled genre, that too at a low capital cost as these units are basically labour intensive. They also sustain rural economies as many of these products are developed indigenously in rural areas. The products are usually so unique that they offer great potential for export thus generating revenue in international currency. Due to low production costs and cottage industry like work environment, they can hold themselves up even during economic instability.