Role of MSMEs and Why Important MSMEs
Today Industrialization and Urbanization Interconnection and Synonyms Phenoniums have become in India. And also with the change in times, India has taken important steps in Mechanization and Automation in its Agriculture, Industrial, and Service Sectors. Technology has improved productivity. But with the change in time, there has been a big failure in the economic growth of the Indian demography such as a lack of job creation.
MSME means micro small medium enterprises and the classification of economic entities based on investment and turnover. The classification of economic entities has been formally defined in the MSME Development Act of 2006. This MSME Act has different criteria for manufacturing and service sector enterprises. According to the recent amendment,
According to the data of the 73rd round of the National Sample, there are about 6.33 crore MSMEs in the country. Most of these MSMEs are in Uttar Pradesh and West Bengal. Which together contribute 28% of the total MSMEs. 93% of the total MSMEs are in the micro category. While only 1% are in the medium category. That is, most of the MSMEs are micro-enterprises. There is low capital investment in MSME units. Micro Enterprises can be started with less than 1 crore investment. MSMEs units were the hope in the private sector to advantage of the country's economy. Apart from this, the development of MSMEs is irrepressible for the survival of any big industry. Even the biggest industries get their components manufactured from MSMEs units. For example, even the biggest industry like Maruti Suzuki Automobiles makes all the small parts used in the vehicle from MSMEs vendors. Due to the ligation and simple structure, MSMEs units can minimize production costs. And also has the necessary flexibility to meet changes in needs. And due to the many benefits available from the government, MSMEs are also able to maintain it efficiently.
Role of MSMEs
MSMEs made massive contributions to various areas of Indian economics. Such as economic output, employment, foreign exchange earnings, socio-economic justice, GDP growth, etc. For this reason, MSMEs are called the backbone of the Indian economy. The MSME sector is responsible for 37.5% contribution parts of India's GDP. Talking about gross value added, MSMEs hold more than 1/3 share. That is, small enterprises together generate an output of about1.3 a trillion dollars. There are 6.33 crore units of MSMEs in India, of which 51% are located in rural areas. Apart from this, the units located in urban areas also contribute a lot to the economic development in Tier 1 and Tier 3, and other smaller cities. About 2/3 of the population of India lives in rural areas. performance of MSMEs is crucial to maintain the rural demand.
Economic growth has been at different levels in the country's different regions. MSMEs have reduced the Unreasonable balance by reaching the smallest parts of the country. To enable balanced economic growth and development. According to the 73rd Round Report of the NSS National Service Scheme on Unincorporated Non-Agriculture Enterprise MSME Sector, it provides employment to around 11. 10 crore people.
