Factors Affecting the Growth and Performance of MSME in India

Abstract

Micro, Small and Medium Enterprises (MSMEs) are contributing to the development of Indian Economy by widely creating job opportunities and producing consumer oriented products thereby reducing inequality and poverty. The emergence of the MSMEs and its capability to produce more goods and services at a low labour and capital cost makes it favourable to contribute in India’s overall exports production and employment generation. It significantly contribute around forty-five percent in manufacturing output, more than forty percent in exports, twenty-eight percent in the Gross Domestic Product and create about one hundred million employment opportunities. The present paper endeavours to evaluate the performance of MSMEs and enlightens the factors affecting the growth of MSME in India. The time period of study is taken from 1990-91 to 2017-18. The data is taken from published annual reports of MSMEs and published survey reports of Government of India. The technique of Multiple Regression Analysis is used to calculate the relationship between the growth of MSME and different factors affecting it. The paper reveals that there is strong need to manage the man power and decrease the number of sick units of MSME as both play an effective role in the overall performance of the MSMEs.