Micro, Small and Medium Enterprises (MSME)

Micro, Small and Medium Enterprises (MSME)

The previous chapter highlighted the importance of international finance, the various sources of mobilising international finance, the concept of FDI and its merits and drawbacks. The present chapter enlightens the students on the concept of Micro small and medium enterprises, role and significance of MSMEs. An overview of the concept of the Self Help Group and its objectives features and functions are briefly discussed in the present chapter.

Entrepreneurship is the key for economic development of any country By empowering entrepreneurs, MSME sector provides more employment opportunities to the people of India. It helps towards the industrialization of rural and backward areas. This sector reduces regional imbalances. It provides equitable distribution of national income and wealth.

Micro enterprises are engaged in low scale activities such as clay pot making, fruits and vegetable vendors, transport (three wheeler tempos and autos), repair shops, cottage industries, small industries, handlooms, handicraft works etc.

Definition

In accordance with the provisions of Micro, Smalland Medium Enterprises Development Act 2006, the micro, small and medium enterprises are classified into two classes.

A. Manufacturing Enterprises

They  refer  to  the   enterprises   engaged in the manufacturing or production of goods pertaining to any industry specified in the first schedule to the Industries (Development  and  Regulation)  Act, 1951. The manufacturing enterprises are defined in terms of investment in plant and machinery.

B. Service Enterprises

They refer to the enterprises engaged in providing or rendering of services.