Question.
“Micro, Small, Medium Enterprises (MSMEs) are the drivers of economic growth and employment proliferation in India”. Examine this statement.
(UPPSC, UP PCS Mains General Studies-III/GS-3 2018)
Answer.
“Micro, Small, and Medium Enterprises (MSMEs) are the drivers of economic growth and employment proliferation in India” is widely acknowledged. The MSME sector accounts for about 45 % of industrial production in India and also this sector is the second largest employment-generating sector after agriculture.
“Micro, Small, and Medium Enterprises (MSMEs) are the drivers of economic growth and employment proliferation in India” are examine by the following:
Economic Growth:
MSMEs contribute to the country’s Gross Domestic Product ( GDP) by providing goods and services, enhancing productivity, and promoting industrialization.
MSMEs contribute to around 30 % of India’s GDP, highlighting their significant role in the overall economic output.
Promoting Entrepreneurship:
The MSME section fosters entrepreneurship, innovation, and competitiveness, which are essential for sustained economic progress.
This sector provides opportunities for individuals to start their businesses with relatively lower capital investment.
This sector is also a frontrunner for adopting new technologies and driving productivity enhancements.
Employment Generation:
The MSME sector is labor intensive sector, so they provide a large number of employment to a vast section of the population, including skilled, semi-skilled, and unskilled workers.
Employment opportunities offered by MSMEs contribute to poverty reduction, rural development, reducing urban-rural disparities, and inclusive growth.
Regional Development:
MSMEs are crucial for regional development as they are mostly installed production units in rural or economically backward areas due to cheap sources of labor.
These enterprises help to reduce regional disparities and regional development. They contribute to the overall development and well-being of different regions.
Export Potential:
They also contribute to exports, thus strengthening India’s balance of trade. It contributes about 45 % of the overall exports from India. The major share of export from MSMEs comes from textiles, handicrafts, and leather goods.
Inclusive growths:
MSMEs often provide opportunities for marginalized sectors of society like women, the rural population, and the unskilled population.
In conclusion, MSMEs play a critical role in driving economic growth and employment proliferation in India. Their contribution to employment generation, GDP, entrepreneurship, regional development, export potential, and inclusive growth highlights their significance in the Indian economy.
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