THE GOVERNMENT of India, Ministry of MSME, has recently released the data of the 4th All India Census of Micro, Small and Medium Enterprises (2006-07) which was launched in May 2008 and was completed in 2009.
As per this census, there are total of 2,61,00,797 MSMEs in India out of which 1552491 (5.95%) are registered and 2,45,48,306 (94.05%) are unregistered units. Togather, these MSMEs provide employment to about 60 million (9.5 million in registered and 50.3 million in unregistered units) people. Out of registered units 28% are in manufacturing and 72% are in service sector.
A comparison of data of 4th census (2006-2007) with 3rd census (2001-2002) suggests that:
Employment per unit has increased from 4.48 to 6.24 persons.
Fixed investment per unit has increased from Rs 6.68 lakhs to Rs 33.78 lakhs.
Gross output per unit has increased from Rs 14.78 lakhs to Rs 46.13 lakhs.
The closure of units has decreased from 39.1% to 21.64%.
Sickness of units has increased from 13.98% to 14.47%.
The 4th census had also depicted that despite Govt declared policy to promote and support MSMEs, the credit flow to this sector as percentage of total bank financing has come down from 17.5% in 1192 to 8.5% in 2006.
The economic survey 2009-10 presented in parliament on 25.2.2010 also mentions that major reasons for sickness of MSMEs are lack of demand and lack of working capital.
As per the planning commission about 10 million new youths are added every year to India’s unemployed population seeking employment. With saturation in agriculture sector erstwhile major wage provider, job ban in central/state govt and negative employment growth in corporate sector for over a decade, only sector which seems promising enough to absorb unemployed youth to some extent is MSME.
It is therefore imperative that Micro and Small Enterprises are to be promoted and supported by policy frame work as well as financially so that there may be more and more job providers than the job seekers in India. Besides this the development of MSMEs is the best way to ensure equitable and inclusive growth. It is for this reason that Micro and Small Enterprises are provided some kind of support in almost all countries world over whether developed or developing economies.
