Performance of Micro, Small and Medium Enterprises in Indian Economy

Abstract

The paper reviews the role of Micro, Small and Medium Enterprise (MSMEs) in India and its contribution in the Indian Economic Development. Micro Small and Medium Enterprises (MSMEs) play a crucial role in the economic development of a country especially for the developing countries where they regulate economic activities and generate employment thereby helping in poverty reduction. In India, the MSME sector is the second largest employer after agriculture. The sector plays an important role in employment generation with relatively less capital investment and at the same time helps to develop the non-farm sector of the economy. With this, it helps in increasing industrialization in rural areas. The paper seeks to explore the growth in the MSME units, employment generation, GDP contribution and exports of the Indian MSME sector. The Contribution of MSME to the G.D.P of the country is around 30%, with 45% of manufacturing output and around 40% of the country’s export. With this it acts as a driving force for the nation's backward and rural areas.