AN APPRAISAL AND DEVELOPMENT OF M.S.M.E.s IN NORTHERN INDIA

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1 AN APPRAISAL AND DEVELOPMENT OF M.S.M.E.s IN NORTHERN INDIA Simanpreet Kaur Research Scholar, School of Management Studies, Punjabi University, Patiala Dr Sandeep Singh Virdi Assistant Professor, School of Management Studies, Punjabi University, Patiala ABSTRACT Micro, Small and Medium Enterprises (MSME) in India is playing a key role in the economic development of India. They are not only promoting entrepreneurial culture in India but also creating job opportunities. In India MSME sector is regulated by Ministry of Micro, Small and Medium Enterprises and controlled by the Micro, Small and Medium Enterprises Development Act, The present paper focuses on Progress of MSMEs in northern India evaluated on the basis of number of units assisted. Margin money utilized and estimated employment generation. The six states of Northern India were made part of the study that included Jammu and Kashmir, Punjab, Haryana, Uttarakhand, Rajasthan and Himachal Pradesh. It was found that there was significant difference between states and amongst years with regard to Number of units assisted and margin money utilized. KEYWORDS Micro, Small and Medium Enterprises, Northern States of India 81

2 INTRODUCTION Industry is an integral part of development of any Nation. Micro, Small and Medium enterprises have a distinctive feature as they require low capital base which made many entrepreneurs invest in this industry. The definition of micro, small and medium enterprises has been formed on the basis of investment done in the plant and machinery and equipment for the enterprises involved in manufacturing and services industry respectively. The limit is classified as follows: Classification Table 1 Manufacturing Enterprises (On the basis of Plant & Machinery) Service enterprises (On the basis of Equipment) Micro Upto Rs.25 lakhs Upto Rs. 10 lakhs Above Rs. 25 Lakhs but not Above Rs. 10 Lakhs rupees, Small exceeding Rs. 5 Crores but not exceeding Rs. 2 Medium Above Rs.5 Crores but not exceeding Rs.10 Crores Crores Above Rs. 2 Crores rupees but does not exceed Rs. 5 Crores rupees Further, MSMED Act i.e. Micro, Small and Medium Enterprises Development Act,2006 was formed to address policy issues for this sector. This Act was formed to set up national board for MSMEs, to classify enterprises, to set up advisory committees and to take measures to promorote and develop MSMEs. Then, Northern part of India constitute of six states and two union territories. The states include Jammu and Kashmir, Uttarakhand, Punjab, Haryana, Himachal Pradesh and Rajasthan. The Union Territories include Delhi and Chandigarh. The present study is confined to the states of northern India. A study of Number of Units assisted, Money Utilized and Number of employment generated is done across these six states. 82

3 REVIEW OF LITERATURE The following studies have been done relating to the present study: Katyal and Xaviour (2015) focused on the HR operations and systems in MSMEs along with other challenges faced by this sector. He found that there were very few MSMEs that had a separate HR department and especially in new units the owners were handling the HR practices. Vasu and Jayachandra (2014) analysed the growth and development in micro, small and medium enterprises in India. They also studied the problems and prospects of this sector. It found out that this sector has performed continuously well over years and with proper emphasis and government initiations, the problems could be overcome. Jaswal (2014) examined the problems and prospects of the micro, small and medium enterprises. He found that after agriculture, this is the only sector to provide maximum number of employment. He found that this sector has huge potential and crucial aspect of the economy of India. Gopal and Ramesh (2014) examined the role of resource efficiency for sustainability i.e. improvement in energy efficiency and process yield in ferrous MSME industry. Then also a comparison between European foundaries nd Kolhapur MSME foundaries has been done. Dangi and Ritika (2014) focused on the growth and potential of MSMEs and the problems faced by women entrepreneurs in India. The paper also analysed the initiatives taken by the government regarding women entrepreneurs. Biswas (2014) studied constrainsts in MSMEs with respect to banking sector. The study found out that though banks are catering to different needs of this sector but still there is a significant gap in overall finance in micro, small and medium enterprises. Appasaba et al. (2013) studied the growth, development and problems faced by MSMEs. The paper also examined the provisions of the MSMED act, 2006 and provided some future policy framework for the sustainability of this sector. Venkatesh and Muthiah (2012) studied the importance and contribution of SMEs in India. The study revealed that the support of the national and state governments was not adequate for this sector. This sector needed to be nurtured for the economic well-being of the nation. 83

4 Alamelu and Baskaran (2011) analysed the role of MSMEs as a key towards entrepreneurship development in India. The study discussed about the challenges and the need for greater engagement of MSMEs. They also discussed the strategies for the promotion of this sector. OBJECTIVES OF THE STUDY The following are the objectives of the study: 1. To study the trends of Number of Units assisted by MSMEs in Northern states of India. 2. To examine the pattern of Margin Money Utilised by the MSMEs by the states in Northern India. RESEARCH METHODOLOGY The study is based on secondary sources of data. The annual reports of Ministry of Micro, Small and Medium enterprises of last 5 years i.e to has been made part of the study. Additional information has been acquired from IFC-intellcap analysis, MSME Census and MSMED Act,2006. The study constituted of the northern region of India. Six States have been made part of the study which included Jammu and Kashmir, Punjab, Haryana, Himachal Pradesh, Uttarakhand and Rajasthan. DATA ANALYSIS The present study makes comparison between the number of units assisted in, margin money utilised and the employment generated by the MSMEs in Northern stares of India i.e. Jammu and Kashmir, Himachal Pradesh, Punjab, Haryana, Rajasthan, and Uttarakhand. The total Number of Units Assisted, Margin Money Utilised and Estimated Employment Generation across India is as follows: 84

5 S.No. Year No. of Units Assisted Table 2 Margin Money Utilised (in Lakhs) Approximate Generation (No. of Persons) Source: Annual Reports of MSMEs from to Figure 3 S. No The figure shows that the number of units assisted in MSMEs have fallen from to However they rose by a significant number in which is the highest number among all the previous years. The least number of units were assisted in the year The margin money utilized was least in the year and highest in the year State Table 3 No. of Units Assisted Jammu and Kashmir Himachal Pradesh

3. Punjab 640 348 942 743 406 4. Haryana 666 243 939 608 738 5. Rajasthan 1497 66 1278 1012 810 6.

6 3. Punjab Haryana Rajasthan Uttarakhand Null Hypothesis H0: There is no significant difference between states with regard to number of units assisted. By testing this hypothesis with the help of ANOVA, it was found that p-value was between states. Hence, we can say that we reject the null hypothesis and state that there is credible difference between states with regard to number of units assisted. H1: There is no significant difference amongst years with regard to number of units assisted. The p-value came between years, which shows that there is a significant difference amongst the years with regard to number of units assisted. Hence, we reject our null hypothesis. Figure 4 No.of units assisted from to S. No State Table 4 Margin Money Utilised (in Lakhs) Jammu and Kashmir Himachal Pradesh Punjab Haryana

5. Rajasthan 2588.80 213.22 4056.87 2494.86 1650.35 6. Uttarakhand 850.50 86.95 2099.99 886.74 518.

7 5. Rajasthan Uttarakhand Null Hypothesis H2: There is no significant difference between states with regard to Margin Money utilized. By testing this hypothesis with the help of ANOVA, it was found that p-value came , which showed that there was a credible difference between the states with regard to margin money utilized. Therefore, we reject the null hypothesis. H3: There is no significant difference amongst the years with regard to Margin Money utilized. By testing this hypothesis, the p-value came out to be , which meant that there was a significant difference amongst the years with regard to Margin Money utilized. Hence, resulting in rejection of the null hypothesis. Figure 5 Margin Money Utilised from the period to S. No State Table 5 Estimated Employment Generation (No. of Persons) Jammu and Kashmir Himachal Pradesh Punjab Haryana

5. Rajasthan 14590 317 13280 8410 5747 6. Uttarakhand 3738 485 7335 2991 1852 Figure 6 Estimated employment generation (No.

8 5. Rajasthan Uttarakhand Figure 6 Estimated employment generation (No. of Persons) The above table and figure show the estimated employment generation that was predicted over the period of last five previous years. In the year , where Rajasthan was expected to be the leading state in employment generation, but in Jammu and Kashmir was expected to have the highest employment generation. CONCLUSION The paper examined the trends in MSMEs over the past five previous years with respect to Number of Units assisted and Margin money utilized. There were significant differences found in the data over the years to among these five states with regard to these two aspects. Then a comparison of figures of across the nation was also made. It was found that maximum number of units was assisted in the year and money utilized was in Hence, we can conclude that the trends in MSMEs regarding the above mentioned aspects have shown upward and downward trends over the last five years. 88

9 REFERENCES Vasu,M.S. and Jayachandra K. (2014). Growth and Development of MSMEs in India: Prospects and Problems, Indian Journal of Applied Research, 4(5), Katyal, A. and Xaviour, B. (2015). A Study on MSMEs - Role in Propelling Economic Development of India & a Discussion on current HR issues in MSMEs in India, International Journal of Scientific and Research Publications, 5(2), Venkatesh, S. and Muthiah, K. (2012). SMEs in India: Importance and Contribution, Asian Journal of Management Research, 2(2), Alamelu K. and Baskaran R. (2011). MSMEs: The Key to Entrepreneurship Development in India, Bonfring International Journal of Industrial Engineering and Management Science, 1(Special Issue), Appasaba L. V.,Kiran.G and Kadakol A.M.(2013), Msmes In Economic Development-A Case Study Of Shimogga Area, International Monthly Refereed Journal of Research In Management & Technology, 2, Jaswal S.S. (2014), Problems and Prospects of Micro, Small & Medium Enterprises (MSME s) in India, International journal of innovative research and studies, 3(5), Nand Gopal E. andramesh D. (2014), Resource Efficiency for Sustainability in Ferrous Foundry- A Case of Kolhapur MSME Cluster, Indian Foundary Journal, 60(2), Dangi N. and Ritika (2014), Women Entrepreneurship and Growth and Performance of MSMEs in India, International Journal of Advance Research in Computer Science and Management Studies, 2(4), Biswas A. (2014), Bank lending to MSMEs in India, IRC s International Journal of Multidisciplinary research in social and management sciences, 2(3), URLs REFERRED

IMPACT OF GLOBALIZATION ON MICRO, SMALL AND MEDIUM ENTERPRISES IN INDIA. Mr. S. MOHANDASS. Head, Research Department of Commerce,

IMPACT OF GLOBALIZATION ON MICRO, SMALL AND MEDIUM ENTERPRISES IN INDIA Mr. S. MOHANDASS Head, Research Department of Commerce, Sri Vinayaga College Of Arts and Science, Ulundurpet Mr. E. SUBRAMANIYAN