Performance and Growth of MSMEs in India: An Analysis of Schemes and Challenges

Abstract

After agriculture, MSME sector holds second position in generating employment opportunities in Indian economy. MSMEs also enhance industrialisation in rural and backward areas thereby reducing economic inequalities in the economy. In spite of its contribution and significance in the Indian economy, the MSME sector has been facing various problems. Thus, the primary purposes of this paper are to analyse the performance and growth of MSMEs, to examine the schemes implemented for promotion of MSMEs and to explore the challenges of MSMEs in India. The data has been collected from the annual report (2017-18) of Ministry of MSME, Government of India. The study found that the performance of MSMEs has a significant role in economic growth of India. The study also explored that in spite of various schemes of the government, MSMEs are facing many challenges like basic infrastructure, inadequate and timely finance, unskilled working forces, lower technology, poor marketing strategy, a heavy competition from large scale industries etc. The study suggests that the government should implement the schemes properly and give adequate support for the development of MSMEs through trainings, tax incentives, subsidies, adequate and cheaper credit, good infrastructure and marketing facilities etc. MSMEs need to up-grade their technology and put more emphasis on innovation.