MSMED Act, 2006- A Promotional Tool for MSMEs in India

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Khinda, Updesh ; Kaur, Gagandeep ; Singh, Dr. Nachattar ; Sandhu, Dr. H S (2014)
  • Publisher: Journal Of Business Management & Social Sciences Research
  • Journal: Journal Of Business Management & Social Sciences Research (issn: 2319-5614, eissn: 2319-5614)
  • Subject: Business Management | MSME Act 2006,GDP,GOI, Small Industries, Promotion, Employment, Poverty alleviation.

All over the map, MSMEs are acknowledged as a conspicuous constituent of national economies as these contribute significantly to GDP, employment generation, utilization of local skills and resources, equitable distribution of income and wealth and poverty alleviation. As MSMEs employ labour intensive technology, these absorb larger population of highly populated country like India. It was unearthed that in India, the total number of operating MSMEs is 447.73 lakh and these units provide employment opportunities to 1012.59 lakh (Annual Report, MSMEs, 2012 -13). It has been identified that MSMEs contribute nearly 8 percent of the countrys GDP, 45 percent of the manufacturing output and 40 percent of the exports (Report of Ministry of MSME, Government of India (GOI), 2014). Being cognizant about the crucial role of MSMEs, govt enforced MSMED Act, 2006 which redefines the meaning of MSMEs. In India, prior to the enactment of this very act, small industries were comprised of tiny, cottage, traditional, and village enterprises. This Act not only attempts to expedite the development and global competitiveness of MSMEs but also introduces expanded advisory functions . It legally recognises the concept of enterprise which comprises both manufacturing and service entities. It seeks to integrate the three tiers of these enterprises, namely, micro, small and medium (Ministry of MSME, GOI). In present study an effort is being made to have an overview of MSMED Act, 2006 and its impact and to sketch various schemes and programmes of government for the promotion of MSMEs. This paper also highlighted the key challenges and problems comprising financial constraints, poor technology and poor marketing facilities faced by MSMEs in India and it finally recommended some suggestions to policy makers to make MSME Industry more competitive and efficient at global level in this highly competitive era. The Data used for analysis in present study is secondary in nature and collected from various reliable published sources of govt such as Statistical abstracts of India, Fourth All India Census of MSMEs, Annual Reports of various departments of GOI, Annual reports of Ministry of MSME ,Report of World Bank Group (International Financial Corporation) etc.
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