An Analysis of Micro, Small and Medium Enterprises in India.

ABDUL MOIZZ
GH-8567
16-ECM-17
AN ANALYSIS OF MICRO,
SMALL AND MEDIUM
CONTEN
INTRODUCTION
T
CLASSIFICATION OF SSI PRIOR TO MSMED ACT 2006
DEFINITION OF MSMEs
PRODUCTS
CONTRIBUTION
ROLE OF MSME IN EMPLOYMENT
ECONOMIC GROWTH AND EXPORTS
MSMEs AND INCLUSIVE GROWTH
CHALLENGES FOR MSMEs
GOVERNMENT ROLE
MAJOR PLANS & SCHEMES IMPLEMENTED BY THE MINISTRY
RECENT INITIATIVES
CONCLUSION
INTRODUCTION
The SSI or MSMEs Sector is
Highly Vibrant and Dynamic sector of

Indian economy
The engine of economic growth
Promote equitable economic
development
Complementary to large industries
Panacea for several economic woes
CLASSIFICATION OF
SSI PRIOR TO
MSMED ACT 2006
Before MSMED Act, 2006 the SSI sector covers a
wide spectrum of industries-
Small-scale industrial undertakings

Ancillary industrial undertakings (ANC)
Export-oriented units (EOUs)
Tiny Enterprises (TINY)
Small-scale service enterprises (SSSEs)
Small-scale service business enterprise (SSBEs)
Artisans, Village and Cottage Industries
Women Enterprises
The Small Scale industrial sector contributes significantly
to Indias GDP and export earning in addition to providing
employment to millions of people across the country.
In 1977 units having investment of less than lakh were

defined as small scale industries while for ancillary units
the investment limit was 15 lakhs and for tiny enterprises
1 lakh
In 1991 the investment limit for SSI rose to 60 lakh, for

ancillary units up to 75 lakhs for tiny enterprises
5 lakhs
In 2000, it rose to one crore for SSI ancillary units 1

crore for tiny enterprises 25 lakh
Source: Wikipedia/SSI India

MSMED ACT, 2006
MSMED Act,
2006
Introduces the concept of enterprise as
opposed to the earlier concept of industry.
Classifies MSMEs into :
Enterprises engage in the manufacture or
production of goods pertaining to any industry
specified into first schedule of industries in the
Development and Regulation Act, 1951
Enterprises engaged in providing or
rendering services
Micro, Small and Medium
Enterprises
Based as investment
on their per MSMED
in plant and Act, 2006
machinery (for manufacturin
enterprise) and on equipment for enterprises providing or rendering
services.
Classification Manufacturing Service Enterprises

Enterprises
Micro Rs. 2.5 million/ Rs. 1 million/
Rs. 25 lakh Rs. 10 lakh
Small Rs. 50 million/ Rs. 20 million/
Rs. 5 crore Rs. 2 crore
Medium Rs. 100 million/ Rs. 50 million/
Rs. 10 crore Rs. 5 crore
CONTRIBUTION
36 million
units
80 million
6000
employment
products
MSMEs
45% 8%
Manufacturing
output
GDP
40%
Total export
Source: Ministry of Micro, Small and Medium Enterprises

NUMBER OF ENTERPRISES
Micro 14.05
lakh
Small 0.76 lakh
Medium 0.03 lakh
5% 0%
95%
Source - Final Report Fourth All India Census of Micro, Small & Medium Enterprises
PRODUCTS
Furniture; 5%
Other Non Metallic Mineral Products; 2%
Education;
Wood & Wood2%Products; 2% Machinery and Equipment; 2%
Repair & Maintenance of Motar Vehicles, Retail Wearing
Sail of Automative Fuels; 5%
Apparel; 12%
Food Products and Beverages; 10%
Textile; 3%
Fabricated Metal Products; 3%
Repair & Maintenance of Personal & Household goods, Retail Trade; 55%
Source - Final Report Fourth All India Census of Micro, Small & Medium
ROLE OF MSME IN
EMPLOYMENT
MSMEs Generates Large-Scale Employment
Contributes about 70 percent of the net new jobs

across the globe
Labour intensity in the MSMEs sector is almost
4 times higher than the large enterprises
Generates highest employment per Capita
Investment
Checks rural migration by providing sustainable
sources of employment
ONTRIBUTION OF MSMEs IN EMPLOYMEN
Source: 1. Fourth All India Census of MSME 2006-07,

2. National Account Statistics (2014), CSO, MoSPI and
3. Annual Survey of Industries, CSO, MoSPI.
ECONOMIC GROWTH
AND
EXPORTS
Sustains economic growth and increase exports
Non traditional products account for more than
95 per cent of the SSI exports
Traditional MSEs have potential to expand the
quantum of exports
Ideal for meeting small orders quantities in
industries such as readymade garments,
home furnishing etc
Promote eco friendly growth, especially in
difficult terrains and ecologically sensitive areas
CONTRIBUTION OF MSMEs IN GDP
AND OUTPUT
Source: 1. Fourth All India Census of MSME 2006-07,

2. National Account Statistics (2014), CSO, MoSPI and
3. Annual Survey of Industries, CSO, MoSPI.
NNUAL GROWTH RATE ON PRECEDING YEAR
20 18.45 18.74
18 17.18
16 14.3
14 11.77 11.83 12.44
12 10.45
10
8
6
4
2
0
Growth Rate
MSMEs AND INCLUSIVE
GROWTH
It is the only source of livelihood for many familie
Touches the lives of the most marginalized section

of the society such as women, Muslims, SCs and
STs unskilled labour
Breaks the cycle of poverty and deprivation
It is dominated by different social group
Focuses on peoples skill and agency

MSMEs DIVISION AMONG
COMMUNITIES
MUSLIM; 9%
SIKH; 3%
CHRISTIAN; 4%
BUDDHIST; 0%
JAIN; 1%
OTHERS; 2%
HINDU; 81%
MSMEs DIVISION AMONG SOCIAL
GROUPS
Other Backward Classes

Others
ST SC
GENDER RURAL/URBAN
WOMEN; 14%
RURAL; 45%
URBAN; 55%
MEN; 86%
Source - Final Report Fourth All India Census of Micro, Small & Medium
Enterprises
CHALLENGES FOR MSME
SMEs faces tough challenges in the perio
of Globalization and Liberalization
Rock-Bottom Prices
Infrastructural Bottlenecks
Financial Bottlenecks
Marketing
Technological
Demonetization
Goods and Service Tax (GST)
Other Problems
GOVERNMENT ROLE
ORGANISATION
Khadi & Village Industries Commission (KVIC)
Mahatma Gandhi Institute for Rural
Industrialization (MGIRI)
Coir Board
National Small Industries Corporation
(NSIC) Ltd
National Institute for Micro, Small and
Medium Enterprises
MAJOR PLANS &
SCHEMES
IMPLEMENTED BY
THE MINISTRY
Scheme of fund for Regeneration of
Traditional Industries (SFURTI)
Prime Minister s Employment Generation
Programme (PMEGP)
Marketing Assistance Scheme
Performance & Credit Rating Scheme
Credit Guarantee Scheme (CGTMSE)
International Cooperation (IC) Scheme
Infrastructure Development Program
Technology Upgradation and Quality Certification
RECENT INITIATIVES
ASPIRE: A Scheme for Promoting Innovation
and Rural Entrepreneurship
Change of Definition of
MSMEs
Udyog Aadhaar
Digital Initiatives
Technology Centre System Programes
Quality Management System (ISO)
CONCLUSION
Lack of reliable and stable economic infrastructure, reduce
growth of credit inflow and technological obsolescence, together
would have let to inferior quality and low productivity are the major
obstacles for small industries in India. At the same time government
policies changes have thrown open new opportunities and market
for the Indian Small industries.
Technological up gradation and in-house technological innovation

and promotion of inter-firm linkages needs to be encouraged
consistently.
Financial infrastructure needs to be broadened and adequate

inflow of credit be insured a technological vibrant, internationally
competitive small industry should be encouraged to make a
sustainable contribution to national income, employment and
exports.

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ABDUL MOIZZ

Highly Vibrant and Dynamic sector of

Small-scale industrial undertakings

In 1977 units having investment of less than lakh were

In 1991 the investment limit for SSI rose to 60 lakh, for

In 2000, it rose to one crore for SSI ancillary units 1

Source: Wikipedia/SSI India

Classification Manufacturing Service Enterprises

Source: Ministry of Micro, Small and Medium Enterprises

Medium 0.03 lakh

Contributes about 70 percent of the net new jobs

Source: 1. Fourth All India Census of MSME 2006-07,

Source: 1. Fourth All India Census of MSME 2006-07,

Touches the lives of the most marginalized section

It is dominated by different social group

Focuses on peoples skill and agency

Other Backward Classes

Technological up gradation and in-house technological innovation

Financial infrastructure needs to be broadened and adequate

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