Question

The solution to the problem of Unemployment in India lies in the careful development of the MSME sector. Suggest some long-term solutions for the economic and financial sustainability of the MSME sector.

Answer 1

Medium, Small and Micro Enterprises:

Manufacturing Sector

Enterprises	Investment in plant & machinery
Micro Enterprises	Does not exceed twenty-five lakh rupees
Small Enterprises	More than twenty-five lakh rupees but does not exceed five crore rupees
Medium Enterprises	More than five crore rupees but does not exceed ten crore rupees

Service Sector

Enterprises	Investment in equipment
Micro Enterprises	Does not exceed ten lakh rupees:
Small Enterprises	More than ten lakh rupees but does not exceed two crore rupees
Medium Enterprises	More than two crore rupees but does not exceed five crore rupees

MSME AND EMPLOYMENT

• MSME sector contributes significantly in the economic and social development of the country by fostering entrepreneurship and generating largest employment opportunities at comparatively lower capital cost, next only to agriculture.
• As per the National Sample Survey (NSS) 73rd round conducted during the period 2015-16, MSME sector has been creating 11.10 crore jobs (360.41lakh in Manufacturing, 387.18 lakh in Trade and 362.82 lakh in Other Services and 0.07 lakh in Non-captive Electricity Generation and Transmission) in the rural and urban areas across the country.

KEY ISSUES OF MSME SECTOR
Most of the problems are controllable while rests are uncontrollable. The MSME`S problems are as follows:

1. Lack of credit from banks
2. Competition from multinational companies
3. Poor infrastructure
4. Unavailability of raw material and other inputs
5. Lack of advanced technology
6. Lack of distribution of marketing channels
7. Lack of training and skill development program
8. Complex labour laws and red-tape
9. Government Policies

SUGGESTIONS FOR IMPROVEMENT
According to our study and the annual reports of MSME’S, we strongly recommend the following suggestions for the growth and development of the MSMEs in India:

1. Mutual Supply of Technologies: While each MSME has its areas of strengths and weaknesses, therefore, it would be mutually valuable if already developed technologies made available to each other. A comprehensive list of all sorts of technologies should be prepared and made available accordingly to the MSMEs requiring it.
2. Constitution of a Panel of Consultants: For the purpose of technological advancement and guidance a panel of experts and consultants should be prepared, who can help the region for effectively transfer the available technologies.
3. Determination of Technological Needs: There should be a detailed survey to assess the technical and financial needs of the MSME. So, the proper arrangement could be made to the needs of the MSME’S. Recently Government announced that 20 technology centres, along with extension centres across the country will be developed by The Ministry of Micro, Small and Medium Enterprises (MSME) in another 3-5 years.
4. Training and development, awareness programs: The currently running programs are not so sufficient. One of the important reasons for slow intake in the utilization of schemes is the lack of knowledge about schemes and their likely benefits. There is a need to develop a better communication strategy and use age media tools.
5. Sufficient availability of credit: there must be the availability of credit according to the requirement at a cheaper rate.
6. Relaxation in labour laws and red tape: There should be relaxation in complex labor laws to avoid the inconvenience in compliance. There should not be uniform labour laws for each MSME. Every effort must do to avoid unnecessary red tape.
7. Proper research and development: There should proper research and development in respect of the innovative method of production and service rendering. The innovative products will provide cheaper products and the MSME’S will be able to cope up with the situation.

CONCLUSION
MSME’s provide job and employment and ultimately self-dependency. In a country like India, only self-dependence is the way, which can be a cure for the devaluation of Indian Rupees. Therefore, MSME’s can be a boon and a hope for the Indian economy in the near future. The MSME’s are very helpful to remove the regional imbalances if it is established in the underdeveloped areas. The future of the MSME sector in India is bright and it will grow the economy.