Microenterprises play a critical role in the economic development of any country, particularly in a developing country like India that is undergoing transition from the traditional subsistence to a modern industrial economy. The role played by these microenterprises in India is immense as they are effective tools for sustainable livelihood, employment generation and empowerment of women, thus contributing to the country’s GDP and social upliftment of the society. This paper tries to develop a framework for the development and success of microenterprises in India by considering two broad categories, i.e., individual and business factors. The individual factors are further subdivided into sociocultural factors, psychological factors and entrepreneurial skills-related factors.

The Micro, Small and Medium Enterprises (MSMEs) play a pivotal role in the overall economic development of the country. It not only plays an important role in providing large-scale employment opportunities at comparatively lower capital cost than large industries but also helps in the industrialization of rural and backward areas, thereby reducing regional imbalances. MSMEs are complementary to large industries as ancillary units and contribute enormously to the socioeconomic development of the country. MSMEs constitute more than 80% of the total number of industrial enterprises and support industrial development in the country. MSMEs contribute nearly 45% to the manufacturing sector and about 40% to the Indian export sector. Their contribution to the Indian GDP is about 8% and the sector has registered a growth rate of about 11% (FICCI MSME Summit, 2012). According to the Final Report of the Fourth All India, Census of Micro, Small and Medium Enterprises published in 2006-07, of the number of enterprises registered, the number of microenterprises alone is about 15 lakhs, which is about 95% of the total MSME sector. The MSME generates 93.09 lakh employment, of which microenterprises alone generate 65.34 lakh employment, which is about 70% of the total MSME sector and the gross output of the MSME sector is 7,07,510 cr crores, of which microenterprises alone generate 3,12,973 cr, which is about 44% of the total MSME sector. MSME promotes the formation of micro and small enterprises in the country with the objective of creating self-employment and upgrading the skills of existing and potential entrepreneurs.

According to the Micro, Small and Medium-Scale Enterprise Development Act (MSMED Act, 2006) of the Government of India, an enterprise is categorized as a microenterprise if it has an investment up to 25 lakh in plant and machinery, excluding land and buildings, and 10 lakh in manufacturing and service-rendering enterprises, respectively.

Business Strategy, Journal, Framework, Development, Success of Microenterprises, Small and Medium Enterprises (MSMEs), Micro, Small and Medium-Scale Enterprise Development, India.