CONTRIBUTIONS:The sector has emerged as a vibrant and dynamic sector producing a vast range of products starting from the basic agro products to high precision.ISSUES AND CHALLENGES :I.
Lack of Adequate Capital and Credit : One of the greatest challenges which constrain the growth of MSMEs in our country relates to inadequate capital and credit facilities. Easy and timely access to credit is crucial factor to development and growth of enterprises. The Report of the Working Group on Rehabilitation of sick MSMEs by the Reserve Bank of India has identified this situation as a crucial reason for industrial sickness of this sector. Complex collaterals instead by the banks, cumbersome sanction procedures and delay in disbursement and high rate of interest on term loans further worsen the situation. II. Poor and Inadequate Infrastructural Facilities: Deficiencies in the infrastructure and poor support facilities marked by inadequate access to basic facilities like water, power supply, road/rail connectivity etc. adversely affect this sector and contribute to enhance their operational cost by rendering the MSMEs less competitive in the challenging market situations.III.
Inadequate Access and Marketing Linkages: Poor marketing linkages characterized by inadequate Government support and patronage, lack of adequate marketing infrastructure/ network facilities continue to be a greater challenge for marketing and sale of MSME products. In a non-cluster situation, these enterprises get segregated and are unable to ensure reduction in procurement cost from big companies and fail to streamline the output-supply chain.IV. Lack of Skilled Human Resources: Non-availability of skilled workforce and better managerial/entrepreneurial expertise at affordable cost near the location of enterprises is another such big challenge for the MSMEs in our country. Lack of managerial competence, absence of proper training on resource planning and capital management etc. hinders the growth of enterprises.V.
Lack of Access to New Technology: Most of the industries today require application of advanced technology in their operations whereas in the Indian context continuance of low technology base results in low productivity by making these enterprises uncompetitive in the ever-widening market contexts. Apart from enhancing productivity and quality, new technology should be adopted for an overall transformation and competitive edge.VI. Dilatory and Cumbersome Regulatory Practices : Cumbersome and dilatory regulatory clearances relating to sanction and disbursement of loans from commercial banks, collateral securities/guarantees, for construction permits, resolving insolvency and taxation etc. continue to be the constraining factors for many MSMEs. Absence of a common regulatory body and inadequate provisions for start-ups affect the growth of such enterprises. Non adherence to RBI guidelines regarding revival/rehabilitation of seek enterprises by the Banks is another such constraint that needs to be addressed.
CHALLENGES FACED BY THE MSME’s:MSME sector to face the challenges of liberalizations. One of the major challenges faced by MSME’s is inadequate access to finance due to lack of financial information and non-formal business practices. They have to continuously update themselves to meet the challenges emerging out of changes in technology, changes in demand, emergence of new markets, etc.
More challenges on the cluster governance systems with the active participation of the stakeholders and to gauge the emerging challenges. Operational challenges such as sparse population, infrastructurual bottlenecks, particularly transport and order conditions.CONCLUSION:MSMEs over the years have assumed greater significance in our burgeoning national economy by contributing to employment generation and rural industrialization. The role and importance of MSME sector in the vital growth of Indian economy has been discussed in the paper.
industrial growth in our developing economy and wellpoised to support national programme like ‘Make in India’.This sector has exhibited enough resilience to sustain itself on the strength of our traditional skills and expertise and by infusion of new technologies, capital and innovative marketing strategies. Appropriate strategies should be evolved for creation of an enabling ecosystem where these enterprises are able to access the benefits meant for themselves under a formal and friendly ecosystem and are further capable of meeting the emerging challenges of a globally competitive order. At the end, this paper has tried to offer some suggestions to overcome those challenges and offer a ray of hope for the MSME sector in India.REFERENCES:1.
Ms. Jahnavi K. Dubal, Financing of SME Firms in India; PARIPEX –Indian Journal of Finance (2015).2. Agarwal S.
P (2006 b); An Innovative Policy Framework for Technology Capacity Building of SMEs; UNESCAP SIS Workshop Beijing China October.3. Vasu, M.
S.; Jayachandra K. (2014) Growth & Development of MSMEs in India: Prospects & Problems Indian Journal of Applied Research. 4 (5). 4.