Future Challenges of MSMEs & Policy Imperatives
Micro, Small and Medium Enterprises (MSMEs) account for a considerable proportion of enterprises, employment, innovations, Gross Domestic Product (GDP), and exports in nations across the global economy, irrespective of their stage of development and prosperity. This has been so, irrespective of the varying rates of fertility and mortality of MSMEs, and despite the changing economic times characterised by intermittent economic crises, economic reforms, and industrial revolutions induced by technological advancements. Their persistent economic contributions are largely attributed to their flexibility, dynamism, need for limited investments, and multiple options for entrepreneurial eruptions from diverse income groups, and relatively easy entry and easy exit feasibilities, among others.
It is their potential and actual economic contributions (in terms of employment and income, among others) which can absorb unskilled, skilled and academically (Science & Technology, and Management) qualified labour force, and thereby ensure a more equitable distribution of income and wealth (within an economy) which has consistently attracted the attention of policy makers and empirical researchers world over. Though varying forms of policy interventions have been introduced in different countries over a period of time, the challenges/constraints of MSMEs with respect to their access to finance, technology, labour, and markets persist. Two propositions are being submitted in this concept note, which seeks to address some specific challenges facing MSMEs in India. Section 1 attempts to explore the domain of industry and the emerging challenges for MSMEs, as well as catalogue some policy imperatives that can synergize the developments in the Industrial sector with the growth of MSMEs in India. Section 2 addresses the challenge of skill-formation in MSMEs and proposes the setting up of an all-India university with state-level branches for MSMEs, modelled on institutions like AIIMS or Agriculture Universities.
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