Hello, This Micro, Small and Medium Enterprises (MSMEs) is the basis of economic development in many developing and developed countries across the country. Which in the context of the Indian economy, experts often term it as a growth engine.
What is Role of MSMEs in entrepreneurship developing Countries – A Guide
MSMEs have played an important role in the development of the country by creating a plethora of employment opportunities. And so far, the sector has employed even more people around 55 million, covering various manufacturing skills and capabilities. Come, we will shed this light. So we will look at step wise step.
1. Balanced Regional Development: Generally small enterprises are located in the village and small towns. Therefore it is possible to have a balanced regional growth of industries. India is a land of villages.
2. Equitable Distribution of Income And Wealth: It removes the drawbacks of capitalism, abnormal profiteering, the concentration of wealth and economic power in the hands of few, etc.
3. Higher Standard of Living: MSMEs bring higher national income, the higher purchasing power of people in rural and semi-urban areas.
4. Mobilization of Locals Resources: The spreading of industries even in small towns and villages would encourage the habit of thrift and investment among the people of rural areas. Get more information about it…
5. Large Employment Opportunities: MSMEs are generally labor-intensive. For every Rs. 1 lakh of fixed investment, the MSME sector provides employment for 26 persons as against 4 persons in the large scale sector. Thus in a country like India where capital is scarce and labor is abundant, MSMEs are especially important.
6. Economical Use of Capital: MSMEs need a relatively small amount of capital. Hence it is suitable for a country like India where capital is deficient.
7. Promotion of Exports: With the establishment of a large number of modern MSMEs in the post-independence period, the contribution of the small scale sector in the export earnings has increased much.
8. Protection of Environment: MSMEs help to protect the environment by reducing the problem of pollution.
9. Shorter Gestation Period: In these enterprises, the time-lag between the execution of the investment project and the start of the flow of consumable goods is relatively short.
10. Facilitate Development of Large Scale Enterprises: MSMEs support the development of large enterprises by meeting their requirements of inputs of raw materials, intermediate goods, spare parts, etc. and by utilizing their output for further production.
11. Simple Technology: New but simple techniques of production can be adopted more easily by MSMEs without much investment.
12. Less Dependence on Foreign Capital: MSMEs use a relatively low proportion of imported equipment and materials. The machinery needed for these industries can be manufactured within the country.
13. Promotion of Self Employment: MSMEs foster individual skill and initiative and promote self-employment particularly among the educated and professional class.
11 MSMEs Important Problems of Micro and Small Enterprises
Some of the more important problems faced by MSMEs are as follows:
1 Govt’s Return Of Clear-Cut Policy: Govt. One can make decisions related to MSMEs based on political considerations rather than economic considerations.
2. Bogus Units: The government should seriously consider this aspect, break the stronghold of such vested interests, and only promote genuine entrepreneurship in the country.
3. Other problems: such as inefficient management, unavailability of cheap electricity, the burden of local taxes, etc.
4. Essential Finance: Generally MSMEs are not in a position to arrange full finance from their own sources. They get finance from the unorganized finance sector at a higher rate of interest.
5. Proper Machinery and Lack Of Equipment: Many MSMEs use inefficient and outdated machinery and equipment. This affects the quality of production.
6. Lack of technical knowledge: Not having knowledge about various alternative techniques and processes for manufacturing their products to improve the quality of products and reduce cost. Get more information about it…
7. Run At Traditional Lines: They have not yet adopted modern methods and techniques of production. He has not taken enough interest in research and development efforts. Therefore they cannot be run efficiently.
8. Irregular supply of raw materials: The majority of MSMEs depend on local sources for their raw agricultural requirements. Small entrepreneurs are forced to pay a higher price for materials because they buy less quantity of materials. Get more information about it…
9. Lack of experience: They may not have specialized knowledge in different areas of management. At the time of starting the project, they are not in a position to correctly estimate their financial requirements and market size Products. Get more information about it…
10. Personal Offer: It is difficult for them to get qualified people to run the business. They cannot provide more training facilities for employees. Get more information about it…
11. Marketing progress: The brand name of MSMEs products is intense due to stiff competition from large industries. It cannot afford expensive advertising and network distribution systems. Big buyers are late in paying bills As a result of insufficient working capital. Get more information about it…
Related Article: 8 Ways to Helping Tips Success in Business
We hope you liked this article. And this article will also strengthen your education. If you liked our article, then you must give us your suggestions by commenting in the comment box below. If you want to succeed in your business, then subscribe to this website. And share this article with your friends and relatives. And follow our social media. Thank you. Your success is our mission.