GROWTH AND DEVELOPMENT OF MSMEs IN INDIA

With the introduction of reform measures in India since 1991, the Govt. has withdrawn many protective policies for the Micro, Small and Medium Enterprise (MSMEs) and introduced promotional policies to increase competitiveness of the sector. Though globalization process has expanded the market facilitating supply of superior technology, this has also forced the MSMEs to face ruthless competition from large domestic firms and the MNCs. The sector has undergone several changes regarding definition. Small Scale Industries (SSI) has been renamed as Micro, Small and Medium Enterprises (MSMEs) with the introduction of MSMED Act, 2006. The current paper is an attempt to critically analyze the definitional aspect of MSMEs and explore the opportunities enjoyed and the constraints faced by them in the era of globalization. Annual Average Growth rate (AAGR) has been used as the major statistical tool to compare the performances of MSMEs during pre and post-liberalization period with the help of four economic parameters namely No. of units, production, employment and export. The study results show that except marginal increase in growth rate in employment generation, the growth rate in other parameters is not encouraging during the liberalization period.

Keywords: Micro, Small and Medium Enterprise (MSMEs), Globalization, Liberalization, Annual Average Growth rate (AAGR), Employment, Export.