Open AccessRegional Trends in Financing and Growth of Indian MSMEs
Author(s) -
Smita Mohapatra,
Post Graduate in Commerce,
Mba in Finance.
Publication year - 2020
Publication title -
international journal of management and humanities
Language(s) - English
Resource type - Journals
ISSN - 2394-0913
DOI - 10.35940/ijmh.c1164.115320
Subject(s) - small and medium sized enterprises , entrepreneurship , business , christian ministry , independence (probability theory) , scale (ratio) , government (linguistics) , economic growth , development economics , finance , economics , geography , political science , linguistics , statistics , philosophy , mathematics , cartography , law
The Indian MSME Sector is the major contributor to the national economy providing it resilience to ward off global economic stress and adversities. With around 60 million units of MSME across India, they promote entrepreneurship and boost employment on a large scale. But since Independence, the Small-Scale Industries didn’t get much attention by the Central Government or State Governments. It took almost five decades for the Govt. of India to realize the potential of MSMEs in economic development of the country. The MSMED Act was passed in Parliament in 2006 to enable vibrant growth of Indian MSMEs and separate Ministry of Micro, Small & Medium Enterprises was created. The Reserve Bank of India has acted swiftly to improve the flow of credit to the MSME sector. Banks and NBFCs have come together in a great way to boost formal credit to MSMEs with all such loans qualifying for Priority Sector Lending classification. But still the growth of the MSME sector has not been uniform across different regions of the country. In this paper, we will try to analyze the regional trends in the financing and growth of MSMEs in India. Secondary data available from various Govt. sources are utilized to draw some conclusions regarding the current growth trends of the MSME units. Chi-square tests and correlation analysis are used to quantify the performance parameters of MSMEs. The paper brings out the figures pertaining to growth of MSMEs across rural and urban India. It concludes by emphasizing the need for enhanced growth opportunities for the MSME sector in low-performance states.