The Micro, Small and Medium
Enterprises (MSME) sector
constitutes an important segment of our national economy.
The MSME sector is estimated to provide employment to over 42 million
people and contribute about 45% of the total manufactured output and nearly
40% to India's exports. The MSME sector is a vast (about 1.3 crore enterprises)
and heterogeneous sector, both in terms of size of enterprises and its sectoral
composition. Some of the major MSME sectors in terms of number of
enterprises and employment are textiles and garments, food processing, metal
and metal products, furniture and fixtures, wood and wood products, leather
and leather products, rubber and plastic products, chemical and chemical
products, auto components, and so on. On the one hand, there are sectors that
are more export-oriented (like textiles and garments, and gems and jewelry),
on the other, there are sectors which are closely connected in value chain to
large domestic enterprises (like auto components). Hence, the magnitude of the
impact of the present global economic slowdown on different MSME
sectors varies considerably.
As per reports received from various MSMEs and its associations, the
major problems faced by MSMEs relate to slackening of demand for their
products/services (especially reduction in export-related orders) and delayed
payments of dues by large units, leading to liquidity crunch. Keeping the above
in view, the thrust of measures taken by the government as well as others,
which include the Reserve Bank of India (RBI) and the Public Sector Banks
(PSBs), are aimed at addressing this problem by making credit available to
MSMEs at affordable rates.
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