The MSME sector contributes significantly to the manufacturing output, employment and exports of the country and is credited with generating the highest rates of employment growth along with accounting for a major share of industrial production and exports. These enterprises have been globally considered as the engine of economic growth and credited with promoting equitable development. The major advantage of the sector is its employment potential at low capital cost. The labour intensity of this sector is much higher than that of the large enterprises. In India too, the MSMEs play an essential role in the overall industrial economy of the country. In recent years the MSME sector has consistently registered higher growth rate compared to the overall industrial sector. According to the MSMED Act, MSMEs are defined on the basis of their investment in plant and machinery and equipment for enterprise rendering services. (Rai, Dinesh, 2010)
rs.2.5 million/ 25 lakh (us$ 50000)
rs. 1 million/ 10 lakh (us$ 20,000)
rs. 50 million/ 5 crore (us$ 1 million)
rs. 20 million/ 2 crore(us$ 0.4 million)
rs.100 million/ 10 crore (us$ 2 million)
rs. 50 million/ 5 crore (us$ 1 million)
1.1. Organizations associated with MSMEs The MSME sector has slowly come into the limelight, with increased focus from the government and other government institutions, corporate bodies and banks. Policy based changes; investments into MSMEs; globalization and India’s robust economic growth have opened up several latent business opportunities for this sector. There are various organizations which are associated with MSME. Such organizations are as follows:
Small Industries Development Organisation (SIDO)
Small Scale Industries Board (SSIB)
National Small Industries Corporation Ltd. (NSIC)
Confederation of Indian Industry (CII)
Federation of Indian Chamber of Commerce and Industry (FICCI)
PHD Chamber of Commerce and Industry (PHDCCI)
National Institute for Entrepreneurship and Small Business Development (NIESBUD)
Small Entrepreneurs Promotion and Training Institute (SEPTI)
Small Industries Development Bank of India (SIDBI) etc.
2. Literature review Many authors through their literature throw light on the various aspects of MSMEs. Chakrabarty, K. C (December 21, 2011) in his speech focuses on the needs of small and medium enterprises, and emphasizes on providing highest priority to this sector in order to achieve balanced, sustainable, more equitable and inclusive growth in the country. Mathew P.K (Jan 2012) in his article explained the relevance of MSMEs in India during the twelfth five year plan. In his article it is described that apart from the entire challenges, MSME stand as the stepping stone to achieve inclusive growth in an economy. Mishra and Jain( 2012) in their article about the relevance of Globalisation of SMEs has contributed production growth, the Growth of total exports of Indian economy. Santosh Kumar and et.al. (OCT 2011) in their article explain the role of small and medium enterprises. MSME is playing a vital input in creating dynamic market economies in the economic and social development of a nation. They also highlight the view regarding entrepreneur who acts as the key promoter of economic growth, innovation, and regional development of an economy.
3. Objective With the introduction and literature review part this paper has followed by the following objectives:
To analysis the impact of MSMEs on Indian Economic Development by analysing its performance through various indicators.
To make a comparative analysis of the MSME sectors with the overall Industrial Sector.
To find out the contribution of MSMEs and GDP growth.
4. Performance of MSMEs The micro, small and medium enterprises (MSMEs) play a pivotal role in the economic and social development of the country often acting as a nursery of entrepreneurship. They also play a key role in the development of the economy with their effective, efficient, flexible and innovative entrepreneurial spirit. Worldwide, micro, small and medium enterprises (MSMEs) have been accepted as the engine of economic growth and for promoting equitable development. MSMEs constitute over 90% of total enterprises in most of the economies and are credited with generating the highest rates of employment growth and account for a major share of industrial production and exports. In India too, the MSMEs play a pivotal role in the overall industrial economy of the country. MSMEs in India account for more than 80% of the total number of industrial enterprises and produce over 8000 value-added products. It is estimated that in terms of value, the sector accounts for 45% of the manufacturing output and 40% of the total export of the country and employs over 6 crore people. Further, in recent years the MSME sector has consistently registered higher growth rate compared to the overall industrial sector. The major advantage of the sector is its employment potential at low capital cost. As per available statistics, this sector employs an estimated 6 crore persons spread over 2.6 crore enterprises and the labour intensity in the MSME sector is estimated to be almost 4 times higher than the large enterprises.
This sector contributes 8 per cent to the country’s GDP, 45 per cent to the manufactured output and 40 per cent to the country’s exports. It provides employment to 60 million people through 28.5million enterprises. The performance of MSMEs can be measured with indicators like production, employment, exports etc. (Table 1.)
Table 1: Performance of MSMEs in India from 1999-2009 Year
Production Rs billion
——– ———- 22.910
Source: Annual Report, 2009-2010, Ministry Of Micro, Small And Medium Enterprise
By taking the above said indicators into account table 1 highlights the performance of MSMEs in India from 1999-2010. The table shows the time series data on various economic parameters of performance of this sector.
Significantly, the MSME sector has maintained a higher growth rate vis-à-vis the overall industrial sector during the past decade. According to a survey, exports from these enterprises have been on the rising trend, despite increased cost of raw materials, sluggish global demand and stiff international competition. Today, the sector produces a wide range of products, from simple consumer goods to high-precision, sophisticated finished products. It has emerged as a major supplier of mass consumption goods as well as a producer of electronic and electrical equipment and drugs and pharmaceuticals. An impetus to the sector is likely to have a multiplier impact on economic growth. MSME constitute over 90 per cent of total enterprises and generating high rates of employment. In India too, MSMEs play a pivotal role in the overall industrial economy of the country and it account for a major share of industrial production and exports. With its agility and dynamism, the sector has shown admirable innovativeness and adaptability to survive the recent economic downturn and recession.
4.1. Comparison of the MSME sector with the overall Industrial Sector The growth of MSMEs can also be measured by comparing the growth rate of it with overall industrial sectors. The increased growth rate of as compared to other industrial sector highlights that this sector has an increasing trend of development in the economy. (Table 2)
Table 2: Comparative analysis of the MSME sectors with the overall Industrial Sector Year
Growth Rate of MSME Sector (per cent)
Overall industrial sector
—– —– 5.70
Source: Annual Report of Ministry of MSME, 2010-11.
Table 2 focuses on this comparison. From the table it is found out that in the year 2002-03 the growth rate of other industrial sector is 5.70 and it is 8.68 in case of MSMEs. In 2007-08, the growth rate of MSME is much higher as compare to overall industrial sector. It is also found out that growth percentage is fluctuating randomly for different years but in case of MSME it is increasing in nature.
5. Contribution of MSMEs in GDP MSME can be rightly called as the backbone of the GDP of India. This sector in India is growing at an exceptionally fast rate due to which it is proving to be beneficial to the Indian economy. However, there are some important points that need to be considered for further development of the MSME sector. Let us first analyze the current figures related to the MSME sector in India. The contribution of the MSME sector to the entire output of the country is 40 per cent. Currently, there are over 11 million MSME units in India that produce more than 8000 products. 90 per cent of the industrial units in India belong to the SME sector. These enterprises or units contribute 35 per cent to the Indian industrial export. (Table 3)
Table 3: Contribution of MSMEs and GDP Year Total industrial production GDP 1999-2000
Source: Annual Report of ministry of MSME, 2010-11
From the table it is found out that total production increases from 39.74 which is 5.86 GDP to 44.86 i.e., 8.72 GDP. From year to year the total industrial production of MSME and GDP is showing an increasing trend. So, it is found out that the contribution is showing an increasing trend throughout the years. The graphical presentation of contribution of MSMEs and GDP is given. (Graph 1)
Graph 1: Contribution of MSMEs and GDP 6. Problems and Measures to Overcome the Hurdles Despite constituting more than 80 % of the total number of industrial enterprises and supporting industrial development, many MSMEs in India have facing a number of problems like sub-optimal scale of operation, technological obsolescence, supply chain inefficiencies, increasing domestic and global competition, fund shortages, change in manufacturing strategies and turbulent and uncertain market scenario.
Due to various constraints the growth rate of MSME is affected. Some of these include:
Fund and finance at cheaper rate is not available sufficiently.
Skilled labour, research and developmental facilities and marketing channels are accessed limitedly.
Difficulty in the part of lenders to perfectly assess the risk premium properly.
Difficulty in accessing adequate and timely finance on competitive terms.
Turnover for the purpose of presumptive taxation of small businesses rose to Rs 60 lakh.
High cost of credit.
Limited access to equity capital.
Problems in supply to government departments and agencies.
Procurement of raw materials at a competitive cost.
Problems of storage, designing, packaging and product display.
Inadequate infrastructure facilities, including power, water, roads etc.
Low technology levels and lack of access to modern technology.
Absence of a suitable mechanism which enables the quick revival of viable sick enterprises and allows unviable entities to close down speedily;
Issues relating to taxation, both direct and indirect, and procedures thereof.
To solve the various problems of MSMEs the government has taken necessary steps. The Government is planning to increase financial assistance for micro, small and medium enterprises (MSMEs) to 80 per cent of their capital requirements in the 11th Five Year Plan. This aid will go towards technology up gradation and plugging of financial gaps. It will be available for existing MSME clusters. Several banks have also focused on the MSMEs; in fact, some of them have launched specific funds to meet the capital requirements of MSMEs. Entrepreneurship development is one of the key elements for promotion of micro and small enterprises, particularly, the first generation entrepreneurs. Entrepreneurship involves the creation of employment and wealth, which is a major means for inclusive development. Hence, entrepreneurship development has been one of the priorities in countries the world over and it also serve as a catalyst for the commercialization of knowledge and contributes to economic growth over and beyond the contributions of R
Aims And Objectives Of Primark Economics Essay
In June 1969, the first Penney’s store opened in Mary Street, Dublin. Within a year, four more stores were added – all in the Greater Dublin area.
In 1971, the first large store outside Dublin was opened in Cork and by the end of that year there were 11 more stores in Ireland and one in Northern Ireland.
Move into Great Britain
By 1973, the number of stores had reached 18 in Ireland and Primark began trading in Great Britain with four out-of-town stores. The following year saw the opening of the first UK High Street stores in Derby and Bristol. In the next ten years, 18 stores were added in the UK and nine in Ireland, bringing the number of stores in the UK and Ireland to 22 each. Also in 1984, the first multiple acquisition took place with the purchase in Ireland of five Woolworth stores.
PRIMARK OBJECTIVES AND AIMS To provide good quality products for the public; we want the public to realize we are a good company and just because our products are cheap, it doesn’t mean that they are rubbish. We will achieve this by having our products made by people that know what they are doing and test them to check that they are good quality. To sell goods at reasonable prices; We want the public to have a wide range of options to them, so we offer them good quality products at reasonable prices; This will be achieved by looking at other stores, selling similar products, and making our prices lower than other places. To be friendly and helpful towards customers and staff; The public need to think that we are a friendly company; this will make them want to come to our store if they feel welcome. We will achieve this by greeting customers as soon as possible and making them feel welcomed. To treat everybody the same; The public need to feel like we treat everybody the same. The people with less money will be treated the same as people that have lots of money.
PRIMARK’s AGM is the most important opportunity this year to put pressure on PRIMARK. This annual shareholder meeting is when important decisions get made regarding PRIMARK’s policies and procedures.
It is PRIMARK’s shareholders who take home the lion’s share of PRIMARK’s profits and who have the power to make PRIMARK introduce policies and procedures that will ensure the lives of workers are put ahead of PRIMARK’s pursuit of profits.
So join us on Friday 5 December from 10.30 onwards to make your voice heard. We have seen how fearful PRIMARK is of us publicly shaming them, so please help us make sure their shareholders deliver justice to the workers making PRIMARK clothes.It beggars belief that PRIMARK has been caught on the back foot again. Just five months on from the BBC exposé that highlighted the appalling conditions faced by Indian workers producing clothes for the famous high street store and PRIMARK has yet again been caught out disrespecting these workers. Join us on 5 December to hammer the nail in PRIMARK’s ethical coffin.
The scope and responsibilities of the existing Primark Data Company (PDC) have been materially increased. In addition to its current responsibilities for economic data and for corporate-wide database integration and concordance, this company will contain all the data operations for Datastream/ICV, Disclosure and World scope. PDC will aggressively acquire new data, improve data quality and reduce costs. With major operations in the United States, the United Kingdom, Shannon, Ireland and Bangalore, India, PDC will provide global data knowledge and support to the three divisions and their customers. Robert Bulk has been named president and CEO of the Primark Data Company. He was previously responsible for the data operations of both Disclosure and World scope
P4 The fundamental economic problem in any society is to provide a set of rules for allocating resources and/or consumption among individuals who can’t satisfy their wants, given limited resources. The rules that each economic system provides function within a framework of formal institutions (e.g., laws) and informal institutions (e.g., customs).
What and how much will be produced? Literally, billions of different outputs could be produced with society’s scarce resources. Some mechanism must exist that differentiates between products to be produced and others that remain as either unexploited inventions or as individuals’ unfulfilled desires.
How will it be produced? There are many ways to produce a desired item. It may be possible to use more labor and less capital, or vice versa. For whom will it be produced? Once a commodity is produced, some mechanism must exist that distributes finished products to the ultimate consumers of the product. The mechanism of distribution for these commodities differs by economic system.
P5 Until ten years ago the term “Welfare Work” was a phrase without meaning in the industrial world. Today it stands for a definite policy on the part of employers which may bring about the solution of many of the vexed problems of labor and capital. The leaven of this policy already has begun to work.
A branch of welfare work through which the company has had a great influence on the people and the surroundings of the neighborhood is that of landscape gardening. At the time when welfare work was started the surroundings of the factory were like those of most industrial plants-anything but attractive. After the company has made its own property beautiful with lawns, shrubbery and vines, it taught the people of the neighborhood, by lectures and demonstrations, the principles of landscape gardening. As a result of this campaign of education the factory neighborhood has been change from a region of tumble-down houses, ash heaps and tin cans to a neighborhood of beautiful homes and well kept yards.
P6 The impact of Macro-economic (Monetary and Fisca)l Policy on the economy
There are some differences in the economic effects of monetary and fiscal policy, on the composition of output, the effectiveness of the two kinds of policy in meeting the government’s macroeconomic objectives, and also the time lags involved for fiscal and monetary policy changes to take effect. We will consider each of these in turn:
Effects of Policy on the Composition of National Output
Monetary policy is often seen as something of a blunt policy instrument – affecting all sectors of the economy although in different ways and with a variable impact.
In contrast, fiscal policy can be targeted to affect certain groups (e.g. increases in means-tested benefits for low income households, reductions in the rate of corporation tax for small-medium sized enterprises, investment allowances for businesses in certain regions)
Consider as an example the effects of using either monetary or fiscal policy to achieve a given increase in national income because actual GDP lies below potential GDP (i.e. there is a negative output gap)
(i) Monetary policy expansion: Lower interest rates will lead to an increase in consumer and business capital spending both of which increases national income. Since investment spending results in a larger capital stock, then incomes in the future will also be higher through the impact on LRAS.
(ii) Fiscal policy expansion: An expansion in fiscal policy (i.e. an increase in government spending) adds directly to AD but if financed by higher government borrowing, this may result in higher interest rates and lower investment. The net result (by adjusting the increase in G) is the same increase in current income. However, since investment spending is lower, the capital stock is lower than it would have been, so that future incomes are lower.
In UK lots of multinational organization are operating, Many people from different part of the world also visited in UK for different purposes, if the global economy fall the business of UK based company also fall down. As a result they faces difficulties to earn profit and ultimately the shareholders suffer.
P7 Perfect Competition:
A market is said to be perfectly competitive when firms perceive that they individually have no noticeable influence on market price. The outcome in such an industry is efficient in the sense that the cost of the last unit of output (marginal cost) would just equal what consumers would be willing to pay for that unit. Perfect competition is a regarded as a benchmark market structure for evaluating other market structures.
Market Structure and Competition: The market structures tells us about the environment within which an enterprise functions and the nature of external pressure on the enterprise. The elements of market structure that we look at are concentration ratio, stability of market shares, conditions of entry and exit of firms. FDI Policy
Stability of Markets Shares A limitation of the above summary measures of concentration is that they ignore the dynamic changes in the market shares of individual firms. Market shares of dominant firms may increase or decline over time. Greater churning of market shares in given market suggests greater intensity of competition.
P8 Market forces and organizational Response: Organizations always responses positively toward market forces.
P9 Company Summary: This section presents the key facts