Small and Medium Enterprises in Economic Growth of India: Directions towards Sustainable Development

• Manvendra Pratap Singh, Arpita Chakraborty, Dr. Mousumi Roy

Abstract

The inclusive growth is prerequisite in any of fast growing developing economies. Micro small and Medium Enterprise (MSME) play vital role in the socio-economic development of the country. In 2011-12, 36.18 mn enterprises were operational and employed around 80.5 mn people of country, second largest after agriculture sector (MSME Annual Report 2011-12). They accounts for 40 percent of India’s total exports, contributing 45 percent to Indian manufacturing output. With all the good things the darker side of MSME, it attracts only 2.33 employees per unit (on an average), they contributes mere 17 percent to the Indian GDP. This paper will highlight the reasons behind the shining India and Bharat. This paper will also focus on the facilities, scheme provided by the central or state government of country, its implementation and possible solutions for empowerment and spreading its boundaries beyond the country through international cooperation scheme.

Keywords: MSME, International Cooperation, regional Economics

Introduction

India’s economic growth is expected to pick up a faster pace in 2013-14 and record six per cent plus levels of gross domestic product (GDP), according to Mr C Rangarajan, Chairman, Prime Minister’s Economic Advisory Council (PMEAC). Country reported to expand at a better growth rate as compared to its three BRIC peers China, Russia and Brazil in May 2013, as per HSBC survey. India witnessed an improvement in its business climate on the back of increased foreign direct investment (FDI) and greater revenue receipts by the Government. The ‘BluFin Business Cycle Indicator (BCI)’, reflects macroeconomic developments on a monthly basis, stood at 165.3 points in July 2013, 5.3 percent higher compared to July 2012 which implies that business performance is comparatively better than previous year.

In economic development scenario, India is leading from all fronts i.e. 2013 FDI confidence Index stands 5th, 2013 Deliotte Manufacturing Competitive Index stands 4^th, 2013 KPMG Change Readiness Index stands 65^th. 2013 Global Innovation Index stands 66^th. While on societal development front, India’s condition is not upright. As per the United Nations Development Programs (UNDP) Human development Index 2013 India stands 136^th. In inequality Index, India stands 91^st, in gender inequality 132^nd, value of multidimensional poverty index is 0.283 on basis of year 2005/2006. A major cause of poverty among India’s rural, urban poor both individuals and communities, is lack of access to regular job opportunity, productive assets and financial resources. High level of inadequate health care, illiteracy and extremely limited access to social services are common among poor people. Seven states – Chhattisgarh, Bihar, Odisha, Rajasthan, Jharkhand, Madhya Pradesh and Uttar Pradesh – account for 61 per cent of India’s total poor. Chhattisgarh is the poorest state in the country with approximately 40 per cent of its population being below the poverty line (www.downtoearth.org ). According to NSSO 66^th Survey 2010, around 52.9 percent of population engaged in primary sector (agriculture and allied sector) contributing 19 percent to gross value added (GVA) of country, 22.7 pe