The Twelfth Plan has listed the following as the objectives for the MSME sector
- Promoting competitiveness and productivity in the MSME space.
- Making the MSME sector innovative, improving technology and depth.
- Enabling environment for promotion and development of MSMEs.
- Strong presence in exports.
- Improved managerial processes in MSMEs.
Evolution and Performance of the MSME Sector in India
- During the post-Independence period, small firms were expected to play an important role in the development process, especially in absorbing surplus labour and achieving an equitable income distribution. This is the traditional stylized role assigned to small industries.
- At the beginning of the industrialization process, flexibility in production and the ability to offer differentiated products allow smaller firms to grow rapidly.
- Later, large-scale firms come to dominate the size distribution, making up a greater share of output, employment, and value-added because of scale economies, managerial efficiency, better access to finance and transportation, and a favourable tariff structure. to finance and infrastructure, and a favourable tariff structure.
- The growth rate of MSME, on an typical has declined considerably in terms of units and even employment but has improved marginally in terms of output and exports, in the post-liberalization period compared to the pre-liberalization period.
- This could be probably due to – (a) With the threat of competition, new MSME units would not have come up as significantly in the liberalization period as compared to the pre-liberalization period (b) The new MSME.
THE TWELFTH PLAN HAS LISTED THE FOLLOWING AS THE OBJECTIVES FOR THE THE MSME SECTOR .