Phase-wise Analysis of Indian Support System for Micro, Small and Medium Enterprise Development

Abstract

India is one of the fastest-growing economies in the world and its economic growth is tightly coupled with the growth of the Micro, Small and Medium Enterprise (MSME) sector. Considering the demographic advantage of having young and educated youth, this sector is regarded as the solution to job creation and inclusive growth. The Indian government is making all efforts in building a robust entrepreneurial ecosystem through various policy initiatives and support measures for the overall growth of this sector. A large number of studies have studied various issues related to the entry and growth of this sector. This study takes a different perspective of analyzing the appropriateness of available schemes at different levels of their growth path. This study also reveals that more support system is available for the creation and growth of MSMEs but not adequate measures are available to cater to the needs for the closure of these enterprises. It is important to have easy exit procedures to better utilize the blocked resources of exiting firms and to remove the fear of failure from prospective entrepreneurs. This paper also suggests further interventions required for enterprise closure to strengthen this sector.