Growth and Future Prospects of MSME in India

In recent years, the significance of MSME has been recognized in the world's countries for its major contribution in various socio-economic objectives such as higher economic growth and employment, output, nurturing entrepreneurship and encouragement and support for exports. MSME play a vital role in the industrial development of any country. The MSME sector is a backbone of Indian economy for its contribution to growth of Indian economy. This sector is very much important for moves towards a faster and inclusive growth of country. The MSME sector can help for achieving the target of Nation Manufacturing Policy that manufacturing should contribute 25% in India's GDP by 2022. For that purpose, the government of India has taken a good initiative of “Make in India”. This paper is to focus on performance of MSME & growth and opportunities. It is concluded that this sector significantly contributes in employment, exports and manufacturing output.


INTRODUCTION
Micro, Small and Mediu m Enterprises (MSM E) sector has emerged as a highly vibrant and dynamic sector of the Indian economy over the last five decades. (Murthy, 2016). The MSME also play a important role in the development of the economy with their effective, efficient, flexible and innovative entrepreneurial spirit. (Dey, 2014). The MSM E sector contributes notably to the country's overall industrial production output, emp loyment and exports. It is recognized with generating the maximu m employ ment gro wth as well as accounting for a major share of industrial production and exports. They have distinctive advantages due to their size and they required low investment. They have relat ively high capital-labor rat io and they require a min imu m gestation period. They try to capture and focus smaller markets; they make sure a mo re fair distribution of national income. They make possible an effective utilizat ion of capital and skill resources and they motivate the growth of industrial entrepreneurship. The MSME sector in India is vast heterogeneous in terms of the size, variety of product and services and level of technology. This sector is large contributes to the socioeconomic develop ment of the country. The MSME sector is an important pillar of Indian economy as it contributes greatly to growth of Indian economy with a vast network of around 30 million units, creating employ ment of about 70 million, manufacturing more than 6000 products, contributing about 45% to manufacturing output and about 40% of expo rts, directly and indirect ly. This sector even assumes greater impo rtance now as the country moves towards a faster and inclusive growth agenda. Moreover, it is the MSM E sector which can help realize the target of proposed National Manufacturing Policy of raising the share of manufacturing sector in GDP fro m 16% at present to 25% by the end of 2022. (PlanningCo mmission) 1 . The object ive of paper is to find current status of performance of MSM Es in India also to examine the major challenges faced by MSMEs for inclusive growth and to find the opportunities available for development of this sector.

II.
LITERATURE REVIEW Venkatesh and Muthiah (2012) found that the role of small and mediu m enterprises (SM Es) in the industrisal sector is growing rapidly and they have become a thrust area for future growth. This research emphasized that development of SME sector is necessary for the economic well-being of the nation. Also they focus on it is essential that the entrepreneurs along with government support take necessary steps for future development. The above literature highlights at the various aspects viz. performance, growth and challenges of MSMEs in Indian economy. Dr. Meeravali S., K.Ramesh et al. (March 2017) found that though MSME total working enterprises, emp loyment and market value of fixed assets grown at CA GR of 4.39%, 4.75% and 6.64% respectively, the contribution from manufacturing and service sector MSME contribution to GDP is -1.53% and 1.82% respectively. Researchers also suggest that government has to adopt integrated policy, promote skill develop ment to increase productivity and also providing accessible credit through government sponsored agency exclusively to MSM E is essential to increase productivity and contribution to economic growth. Singh et al. (2012) analy zed the performance of SSI in India and focued on policy changes which have opened new opportunities for this sector. This study concluded that SSI sector has made good progress in terms of number of SSI units, production and employ ment levels. The stu dy recommended the emergence of technology development and strengthening of financial infrastructure to boost SSI and to achieve growth target.

OBJECTIVES:
The main objective of the paper is to evaluate the overall growth and developments in the MSMEs sectors in India. The second objective is to find key challenges faced by the MSMEs sector as well as also to study future prospects of MSMEs and Third objective is to examine government initiative to regenerate the MSMEs sector.

III.
RESEARCH METHODOLOGY The current research study is based on "Exploratory" in nature. The major emphasis in such study is on the discovery of ideas and insight (Kothari, 1996). The study is based in secondary data covering 18 years i.e. 2001 to 2018. All financial data are co mp iled fro m MSM Es Annual report, Govern ment of India. Different articles and informat ion available in different journals and magazines are also referred for compilation of this paper.

IV.
CONCEPTS Small Scale Industrial Un it (SSIs): As per the Govern ment of India (2000), the small scale undertakings are those which are engaged in manufacturing, processing or preservation of goods and in which the investment in fixed assets, whether held on ownership terms, or on lease or by hire purchase, does not exceeds Rs. 1 crore. Micro Small Mediu m Enterprise (MSM E): Micro, small and mediu m enterprises as per MSMED Act, 2006 are defined based on their investment in plant and machinery (for manufacturing enterprise) and on equipment for enterprises providing or rendering services. The present ceilings on investment for enterprises to be classified as micro, small and medium enterprises are as follows:

Distribution of EM-II by Type of Enterprise
Out of the total EM -II filed, distribution among micro, small and med iu m segments are as mentioned in the following table     /dx.doi.org/10.22161/ijaems.4.8 Table 3 shows that the overall gro wth of industrial sector and the growth of MSM Es sector during sixteen years. This two sectors shoes moderate to high growth rate during early phase of this period. But early period of last six years growth rate of MSM Es was greater than that of the overall industry growth rate. And later on it is decreasing. In 2000-01, the growth rate of MSMEs was 8.00 and it declined to 6.10 next year, then it increasing to reach up to 13.00 of period 2007-08. Later, it decreased and fell to a down of 4.4% in 2010-11 then increased up to 9.10. India needs to create 10 to 15 million job opportunities per annum till 2030 to provide useful employment to its population 3 . In budget 2018-19, the government largely focused on MSMEs as the preferred route for rapid job creation and self-employment. The MSME sector employs over 111 million people and contributes nearly 31% of India's GDP 4 . The total number of enterprises in MSME sector was 46 million with total employment of 106 million. Current MSME employment rate is at 28% of the overall employment. The current growth of MSME is non-uniform and there exists a significant gap in growth of enterprises across services and manufacturing sectors. Steps to lower this gap must be taken for a balanced growth outlook.

Comparison between SMEs contribution to GDP of India and some developed global economies :
V. PROBLEMS FACED BY MSMES 1. Absence of adequate credit fro m banks-The MSM Es are faced more prob lem of credit fro m the banks. The loan process of the banks is very lengthy, so much documentation required with high cost processing fee. The banks are not providing adequate amount of loan to the MSME's.

Co mpetition fro m MNC's-The MSM E's is facing the
huge competition fro m the mult inational co mpanies. Because of mult inational co mpanies are p roviding quality goods at low price. 3. Poor infrastructure-MSME's are developing so rapidly but there is lack of infrastructure facilit ies.
Because of poor infrastructure, their p roduction capacity is very low with production cost is very high. 4. Unavailab ility Resources-Due to non availab ility of raw materials, work force and other inputs in the market. Therefore it is very difficu lt to produce the products at affordable prices.

Lack of advanced technology-In the MSME's sector,
there is a lack of awareness of advanced technologies of production. They are using traditional methods for producing goods. 6. Lack of distribution of marketing channels -MSME's not adopting innovative ideas for promotion of the products distribution and advertisements. Because of ineffective advertisement and poor market ing channels leads to a very poor selling.

VI. FUTURE PROSPECTS OF MSMES 1.
Emp loy ment generation: There are large opportunities in the field of manufacturing and service rendering of MSME's. In the field of retail and manufacturing sector, MSM Es are generating different and ample amount of employment. 2. Focus on customer satisfaction: Primarily, MSM Es manufacturing goods focus on test and preferences, liking and disliking of the consumer. But now a day they produce goods according to the needs or expectations of the customers. So the MSM Es can be more customer satisfaction oriented. 3. Minimization of regional imbalance: The M SM Es will utilize the manpower of rural areas so such areas of the nation can equally developed through the running of