GROWTH the main organization for generating sustainable

GROWTH AND EMPLOYMENT OPPORTUNITIES OF MSMES IN INDIAN MARKET&KHADI AND VILLAGE INDUSTRIESPaper submitted by: S. Venkatesh                                           R.N.Kaushik Email: [email protected]              [email protected]                            Phone: 9566505901                                  9655655407 ABSTRACT:     MSMEs have been playing a important role in on the whole economic growth of India where millions of people are out of work or underemployed and facing the problems of scarcity. MSMEs are providing immediate large scale employment, with lower investments and prove to be a 2nd largest manpower employer after agriculture and occupy a position of distinction in India. It is well known that the MSME sector constitutes the backbone of the country. India is giving a superior priority to the Small and Medium Enterprises (SMEs) from the origin and being continued to support policies to make these enterprises in a successful, vibrant over time and these have become key contributors to Gross Domestic Product. The MSMEs also have the essential role in spreading of ideas in industries and creation of employment opportunities to large scale of extent. The MSMEs are giving work to more than 60 million people. The MSME sector is contributing about 8% of country’s GDP and 45% of manufacture and 36% of its exports. The MSME sector has continuously registered greater growth rate compared to the overall industrial sector. Khadi and Village industries is known as one of the main organization for generating sustainable non-farm employment opportunities in rural areas with lower investments. The Khadi and village industries program holds a great potential for creating a profitable employment opportunities for rural people and for rural unskilled workers by promoting the policy of sustainable growth.KEYWORDS: Micro, Small and Medium Enterprises (MSME), role of MSME in Indian market, Khadi and Village industries.INTRODUCTION:     Micro, Small and Medium Enterprises (MSMEs) in India have shown a rise and consistency in maintaining the rate of growth and employment generation. Indian economy during the recent years has shown an appreciable growth performance by contributing to creation of livelihood opportunities to many peoples in enhancing the export and in increasing the overall economic growth of the country. Prompt and appropriate effective monetary policy and huge capital inflows was very helpful in the loss Economy conditions .Considering the future growth of Indian economy globally, which is expected to grow up to some millions  of its contributions in terms of increased job opportunities in the market, and promoting innovation and entrepreneurship, along with its contribution to GDP by next five years; the Government is giving good support to strengthen the MSME sectors that are the backbone of Indian economy.OBJECTIVES OF THE STUDY:• To know about the current trends in micro, small and medium enterprises in India.• To study about the huge growth potential and employment opportunities available in this sector.• To explore about the khadi and village industries and their contribution to the Indian economy.METHODOLOGY: The data for evaluation of this study are collected mostly from secondary sources by way of access to various Government policies/programs including published Annual Reports, Journals, Books and available official websites.MICRO, SMALL AND MEDIUM ENTERPRISES IN INDIAN SCENARIO: The MSMEs are defined on the basis of investment in plant & machinery and equipments under the MSMED Act, 2006.  The present investment limit for MSMEs is as under:   MANUFACTURING ENTERPRISES:1) Micro enterprises: investment in plant and machinery is upto Rs.25 lakh.2) Small enterprise: investment in plant and machinery is from Rs.25 lakh to Rs.5 Crore..3) Medium enterprise: investment in plant and machinery is from Rs.5 crore to Rs.10 Crore.   SERVICE ENTERPRISES:1) Micro enterprise: investment in equipments is upto Rs.10 lakh.2) Small enterprise: investment in equipments is from Rs.10 lakh to Rs.2 crore.3) Medium enterprise: investment in equipments is from Rs.2 crore to Rs.5 crore.      Role of MSMEs in Indian economy: The role of Micro, Small and Medium enterprises (MSMEs) in the economic and social development of the country is well established.  As per the Annual Report (2016-2107),Micro, Small and Medium Enterprises (MSMEs) the sector contributes 45% of the manufacturing output and 40% of total exports of the country and also it forms the highest share of Employment sector in India contributing around 69% to it. The MSMEs sector contributes approximately 8% to India’s Gross Domestic Product growth. Further, In MSME sector nearly 32% of the enterprises is engaged in manufacturing activities, while the remaining 68% enterprises are engaged in services. Over 6,000 products ranging from traditional to high-tech items are being produced by the MSMEs in the nation. The overall growth in this sector is much higher compared to large industries.                       Share of MSME in Manufacturing, Exports and Employment sectors in India. Sector Percentage(%)Share1 Manufacturing 452 Exports 403 Employment 69 MSME is also called as “Engine of growth”, as it contributing of 8% to GDP.  As mentioned in the above table, from MSME alone the export sector contributes of 40% to India .  Besides manufacturing, export and service sector other sectors are also being benefited from MSME.  Multi-National Companies today are buying semi-finished and other necessary products for their company, from small enterprises. For example, large automobile companies are buying clutches and brakes from small enterprises who are specialized in that field.  It helps to create a linkage between MSME and big companies,    Creation of employment opportunities through MSMEs: The Micro, Small and Medium Enterprises play an important role in creating employment opportunities in the country.  As per the fourth census, Based on employment of Micro, Small and Medium Enterprises data are collected with reference to the base year 2006-2007, also some of the data are extracted from the Economic Census 2005 conducted by Central Statistical Office (CSO), Ministry of Statistics & Program Implementation (MSPI). The total employment in the MSME sector was 805.24 lakh for activities excluded from Fourth Census, namely wholesale/retail trade, legal, educational and social services, hotel & restaurants, transports and storage & warehousing (except cold storage),Details of target fixed for employment generation and estimation of achieved target for employment generated under Prime Ministers Employment Program scheme for four years are given below. Target for employment generation Estimated employment generatedYear 2014-15 2015-16 2016-17 2017-18* 2014-15 2015-16 2016-17 2017-18*All India 703492 516232 434758 406272 357502 323362 407840 85792                            As per the above table, target for employment generation is fixed at lower value from 2014-2018, But the employment generated is keep on increasing from 2014-2018. It is because of MSME can be easily set up with low investments. It is the main reason for generating greater employment opportunities..KHADI AND VILLAGE INDUSTRIES:  In various states of India, majority of people lives in rural area and hence, the economic development is slow due to poverty.  To eradicate poverty, the basic needs of the people is to be fulfilled, it can be attained only by way of increasing the purchasing power of the people, which will lead to the development of economy.   The purchasing power can be increased only through employment. Other than agriculture there is no way of earnings for rural peoples, because for starting of new business high amount of investments are necessary. For solving the problem of unemployment, Khadi and Village industries are introduced and It can be easily started with low investments. After introduction of Khadi and Village industries, It created a huge employment opportunities for rural people. The main objective of Khadi and Village industries is to generate more employment opportunities and solve the major problem of rural people i.e. poverty.   Role of Khadi and Village Industries:          Khadi is the proud legacy of our national freedom movement and the father of the nation.  Khadi and Village Industries are two national heritages of India. This sector not only serves the basic needs of processed goods of the vast rural sector of the country, but also provides sustainable development to rural artisians. It represents a wonderful heritage product, which is ethnic as well as ethical. It has prospectively strong customers among the middle and upper class of the society. The Khadi and Village industries continue to be more relevant in the globalized India.  India is now reaping the benefits of demographic dividend. India should provide/facilitate its youths to get the jobs, so that their energy is channelized in right direction towards economic development of nation.  The already existing surplus labour and the new entrants to the job markets must be provided jobs; otherwise it would prove disaster to the economy.  Globalized India has welcomed FDI established SEZ, but it cannot provide jobs to all those who demand the jobs, except by developing and encouraging the Micro, Small and Medium Enterprises, Khadi and Village industries.    Khadi and Village Industries Commission (KVIC): Before liberty, Gandhiji promoted Khadi industries, which are now monitored under statutory body named “KVIC”. The development of this industry is covered by the Five Year Plans. This body came up in 1956 and it plays a crucial role in the nourishment of rural economy by assisting and developing Khadi and Village Industries. It seeks to achieve its objective by introducing schemes and programs.    Employment opportunities of Khadi: Khadi manufacturing holds top in mass productivity in world. It provides the rural communities a high value of their effort while providing the consumers value for money.  KVIC is a statutory organization tasked with the duty of promoting the production and sale of Khadi.  Over 2,313 institutions from the vast network that is executing the objectives and programmes of KVIC in India. More than 11 lakh people are involved in production activities under KVIC, most of which (almost 70%) are women.  Khadi is the main programme of KVIC and a potent tool for generation of jobs at the artisians’ doorstep being implemented by 2,313 Khadi institutions.  The assistance provided through Market Development Assistance (MDA) and Interest Subsidy Eligibility Certificate (ISEC) Scheme are enabling these institutions to provide more job opportunities to 11.07 lakh traditional people residing around countryside areas. FINDINGS: MSME is a booming segment of the economic development of the country that helps in stimulating industrial growth. It encourages exports and raises employment potential. It regulates capital formation and accountable for sustainable development. Khadi industry creates more employment opportunities for the rural people on the non-farming occupation. The industry can be formed with minimum fund. The new initiatives implemented by KVIC for khadi and village industries helps to increase their performance towards GDP growth on Indian EconomyINTERPRETATIONS:.As per our view, the contribution of the MSME sector to India’s GDP currently stands at 8% for 2016-17 and is growing at a rate higher than the projected GDP growth rate. In Global economies, the MSME contribution is quite high ranging from 25-60%.  Because of sustainable and increasing growth rate,  In the year 2020, the MSME sector will contribute around 15-20% on nations GDP growth. The Government decides to register “Khadi” as brand name in the field of clothing.  Today many new products and new designs are being developed with the help of National Institute of Design and National Institute of Fashion Technology. Packaging of Khadi products is improved.  A mechanism to ensure quality of Khadi products is also evolved in the overall strategy that awaits bright future for KVIC.CONCLUSION: Micro, Small and Medium-sized Enterprises (MSME) are one of the most important sectors, giving a great hand in developing Indian economy.  This is the most active sector leading to growth of the nation, boosting exports, generating abundant employment opportunities, also creates favorable circumstances for banks by allowing it to give more credit to firms in this sector. The Government should take responsibility to facilitate the easy registration and granting more credit options with lesser interest rate for sustainability of this sector. The Government should also provide adequate subsidy, tax exemptions, particularly in sales tax, purchase tax, etc to Khadi and village industries till it can stand on its own and face globalization. Hence Khadi and village industries have to be promoted.  Moreover it has the ability to diminish the unemployment complication existing in rural India to a greater extent.  If we ignore this industry, it is at our own risk!REFERENCES:1. The report of the working group on MSMEs growth for 12th Five Year Plan (2012-2017)(2012) MSME, New Delhi..2. MSME annual report 2016-20173. www.kvic.org.in4. www.pib.nic.in5. MSMED act, 20066. Strategic action plan of Micro, Small and Medium Enterprises (2012-13).7. http://msme.gov.in/MSME-Strategic-Action-Plan.pdf