2) Give a brief account of the major challenges before the micro, small and medium
enterprises (MSME) today.
Answers
Answer:The Indian MSME are recognized as a major contributor in the economic growth. It is said to be the backbone of the Indian economy. It has provided resilience to ward off global economic shocks and adversities. Nearly, 20% of the Indian MSME are based out in the rural areas of India and continues to provide employment opportunities to nearly 40% of the India’s labor force. According to Reserve Bank of India (2017), in the year 2015–16, the MSME sector comprised of more than 51 million enterprises employing more than 117 million persons.
The MSMEs manufacture more than 8000 products. This encompasses a wide range from the traditional products to sophisticated products (in terms of high-tech items). Within the MSME sector, the Coir Industry in India is the largest coir producer in the world. It accounts for more than 80% of the total world production of Coir Fibre. It encompasses a diverse range of people involving households, cooperatives, manufacturers and exporters.
(Annual Report, Micro, Small and Medium Enterprises, (2017–18), Government of India)
The Report of the Working Group on Micro, Small and Medium Enterprises (MSMEs) growth for 12th 5 year Plan (2012–17), unveils that the sector accounts for 45% of the manufacturing output and 40% of the total exports of the country. Further the Ministry of MSME’s (2017), highlights that the MSMEs accounted for 30.74% of GDP in the year 2014–15. Current economic forecast or survey interprets that with the Indian Economy growing at an average of 7% per annum, it is likely to become a $5 trillion economy by the year 2025. Hence, the development of the MSME sector is becomes essential as it is considered to be the backbone of India.
However, in spite high growth rate and good prospects, the Indian MSMEs have been subject to certain constraints. The most notable barriers are lack of timely credit, Procurement of raw materials at competitive cost, inadequate infrastructure facilities including power, water, & road, and lack of skilled manpower for manufacturing, services, marketing, etc. The most important constraints faced till date are technological backwardness.
The Indian MSMEs lack up-to date information and are often unaware about the latest technologies present in the global market. Sometimes they lack managerial skills, entrepreneurial knowledge and technology-intensive education to run a competent MSME. This type of problem normally prevails in the rural-based areas. It is said that Information Communication and Technology (ICT) can play a bigger role for MSMEs as they face stiffer competition from their rival neighboring countries (China, Indonesia, Philippines and Thailand). Hence, the need of the hour is upgradation of technology. For Indian MSME’s to become competitive, it has to adopt the best international practices and constantly upgrade its technology. It is often found that the main challenge for many Small and Medium Enterprises (SMEs) is to cultivate right skills and management practices for establishing and integrating knowledge created by external partners with in-house practices and innovation processes (OECD 2013).
Explanation:
Answer:
Some of the major challenges confronted by these enterprises include; lack of adequate credit and capital, poor and inadequate infrastructural facilities, inadequate access and marketing linkages, technological obsolescence and inadequate application of new technology,lack of skilled human resources,dilatory
Explanation:
hope you will like it