Attitudinal Dimension of Government towards MSME Ecosystem

Abstract

The Micro, Small & Medium Enterprise (MSME) sector is a major driver of growth for the dynamic Indian economy after liberalization. This sector is critical to achieving the targeted growth rate of our nation as it nurtures budding entrepreneurs and incubates innovation at its most rudimentary level; and a growth in the MSME sector not only ensures industrialization in backward areas, but also is a catalyst for equitable distribution of wealth. The World Bank determined that around 200 million people are currently unemployed, and 600 million jobs need to be created by 2020 mainly in developing countries. A number of those jobs are expected to be generated in the MSME sector given its high labor intensity. As per the fourth Census of MSMEs the Report for which was published in 2012, the total number of MSMEs in India are 3.6 crores employing over 8 crore people. It is the second largest employer after agriculture. It also accounts for 45 % of total industrial production, 40% of total exports and contributes very significantly to the GDP. Manufacturing segment within the MSME contributes to 7.09% of GDP. MSMEs also contribute to 30.50% of services. The total contribution of MSMEs to the GDP is 37.54%. Beside this entrepreneurship also reduce concentration of economic power, improve standard of living and after all create background of enthusiasm for overall development. The top priority of Government MSME Policy thus must be not only to encourage establishment and growth, but also, emphasise on growth and sustenance. The purpose of this study is to determine the attitude of government towards creation of new MSMEs. The present study is aimed at to capture the government policy framework that facilitates entrepreneurial ecosystem of a country. The analysis has been made on the basis of indentified parameters of policy framework for nurturing business taking BRICS (BRICS is an association of five major emerging national economies: Brazil, Russia, India, China and South Africa) nations as an experimental unit for mapping the status of India as an incubation hub.