Performance Evaluation of MSMEs During Pre- and Post-liberalisation Era

Abstract

Micro, Small and Medium Enterprises (MSMEs) play a pivotal role in creating employment opportunities. These are more vibrant in countries like India where population is more and labour-intensive manufacturing establishments are huge in number. In general, these firms are established in rural and economically backward regions, thereby a regional balance may be achieved through the equal distribution of wealth. MSMEs are considered complementary to heavy industries as subsidiary units and provide enormous socio-economic development to the nation. MSMEs contribute about 8 per cent of the country’s GDP, with 45 per cent of manufacturing yield and 40 per cent of exports. After the agricultural sector, MSMEs provide lion’s share of employment for the jobless. Further, they provide a diverse range of goods and services that satisfy the needs of local, national and international supply chains. Globalisation is said to be a necessary evil. The advent of the WTO brings a variety of challenges to developing nations as these are frail in bargaining capacity against their counterparts. As a result, developing nations like India are subjected to all those adverse effects of globalisation, and the MSMEs sector is not exceptional. The existing literature in the subject indicates that there is a considerable fall in the growth rate of the number of units, output, exports and employment generation after post-globalisation, and this trend is the matter of serious concern for the policymakers and decision-makers. In this junction, the present article is intended to investigate the impact of globalisation on the performance of MSMEs. The study is divided into three sections. The first section devotes to introduce the study area of the present article, review of the literature and objectives and methodology of the research. The growth and trend of MSMEs in India during the pre- and post-globalisation eras are discussed in the second section. The summary and conclusion of the study is given in the last section.

A Performance Analysis of Indian MSMEs

“…Many studies were conducted on the growth and performance of MSMEs in India [19, 20, 21, 22, 23, and 24] and efforts were also made to study MSMEs in different States [25 and 26] by considering data till 2015. Moreover, an effort was made to study the post-globalization period performance of MSME mainly focused on employment and export [17]. In the year 2020, the MSME demarcation has been modified and many industries were added under the MSME category.…”