Growth Components of MSMEs: A trend analysis in post liberalization era in India

The Micro, Medium and Small scale enterprises (MSME) are considered to be the engine of growth vis-a-vis development in an over- populated developing country like India. The small and medium scale industries not only meet the varying consumption demand of Indians but also create huge employment opportunities for both unskilled and semi skilled workforce. Those industries are also considered as complementary to Large Scale Industries (LSI) since small and medium scale industries are supposed to be the suppliers of intermediate goods for LSIs. However, during the post reform period, several attempts were made by government to increase the number of units as well as the production of MSMEs. Annual survey report on MSMEs shows their performance yearly on the basis of certain parameters like number of units, employment, fixed investment, productivity, exports, organization structure and performance etc. This research work attempts to examine the growth performance of MSMEs in the post reform period in the yardstick of four major parameters – number of total units, employment, fixed assets or investment and production. Not only that, the main thrust of this research work is to initiate a comparative study on these four parameters in order to find out which one has performed better than others in the post liberalization period. The study is based upon both of these two survey studies-‘Annual Report on MSME’ prepared by Ministry of Micro, medium and small scale industries and ‘Fourth All India Census on MSME 2006–07’, also prepared by Ministry of Micro, medium and small scale industries. Finally the paper concludes with some interesting results on growth performance of MSMEs, drawn from the secondary data analysis.