Vijay Project Msme

A Dissertation Report on
A STUDY ON THE MAJOR CONSTRAINTS OF

WORKERS IN MSME AT MEDICAL AREA OF
JHANSI
A dissertation Report Submitted in Partial Fulfillment of the Requirements

for the Degree of
MASTER OF BUSINESS ADMINISTRATION

(MBA-FM)
By
VIJAY KUMAR SINGH

(Roll. No. - 171145095053)
Under The Supervision of
MR. VIJENDRA SINGH

(TEACHING ASSISTANT)
INSTITUTE OF ECONOMICS & FINANCE
BUNDELKHAND UNIVERSITY, JHANSI
(2017-2019)
INSTITUTE OF ECONOMICS AND FINANCE,

BUNDELKHAND UNIVERSITY JHANSI
APRIL, 2019
INSTITUTE OF ECONOMICS AND FINANCE,
BUNDELKHAND UNIVERSITY JHANSI
CERTIFICATE
This is to certify that VIJAY KUMAR SINGH (Roll No. 171145095053) has carried
out the research work present in this Project Report entitled “A STUDY ON THE
MAJOR CONSTRAINTS OF WORKERS IN MSME AT MEDICAL AREA OF
JHANSI”, in fulfillment of the requirements for the award of the Degree of Master of
Business Administration (Financial Management) is a record of original training
undergone by during the year 2017-19 of his study in the Institute of Economic &
Finance, Bundelkhand University, under my supervision.
Place: Jhansi Signature of Guide
Date: 07/04/2019 Mr. Vijendra Singh

(Teaching Assistant)
Institute of Economic and Finance,
Bundelkhand University, Jhansi
DECLARATION
It is hereby declared that the Project Report entitled, “A STUDY ON THE MAJOR
CONSTRAINTS OF WORKERS IN MSME AT MEDICAL AREA OF JHANSI”,
has been prepared as the part for the completion of the degree of Masters of Business
Administration (FM) from Bundelkhand University, Jhansi, is the result of the
project carried out under guidance and supervision of Mr. VIJENDRA SINGH,
(I.E.F, BU, JHANSI).
I hereby declare that it has not been previously submitted to any other institution /
university for any other degree.
Student’s signature
Date: ---/----/------ Student’s name: Vijay kr. Singh
Place: Jhansi Course: MBA-FM 4TH Sem.
Roll No:171145095053
ACKNOWLEDGEMENT
I would like to express my gratitude and regards to my guide Mr. Vijendra Singh
(Teaching Assistant, Institute of Economics & Finance, BU Jhansi) for his
exemplary guidance, monitoring and constant encouragement throughout the course of
the study. The blessing, help and guidance given by him time to time shall carry me a
long way in the journey of life on which I am about to embark.
I take this opportunity express my profound gratitude and deep regards to Prof. C.B.
Singh (Head of Department, I.E.F.) & Dr. Yashodhara Sharma (Associate Prof.,
I.E.F.), Dr. S.N. Singh (Asst. Prof., I.E.F.), Dr. Furkan Malik (Assist. Prof., I.E.F.),
Dr. Sandeep Agarwal (Assist. Prof., I.E.F.), Dr. Radhika Kureel (Assist. Prof.,
I.E.F.), and Dr. Ankita J. Lall (Assist. Prof., I.E.F.), Mr. Rajat Kamboj (teaching
faculty) & All respected faculty members.
I greatly acknowledge to all enterprises owners for giving me the opportunity to work
and giving his precious time to fill up my questionnaire to complete my project.
Last, but not the least I also express, my gratitude to my loving parents, my friends and
well-wishers, who were the source of warm impetus and inspiration, behind the
academic scene.
VIJAY KUMAR SINGH

MBA (FM)4th SEM.
Institute of Economics & Finance
EXECUTIVE SUMMARY
The Micro, Small and Medium Enterprises (MSME) sector has emerged as a highly vibrant
and dynamic sector of the Indian economy over the last five decades. It contributes significantly
in the economic and social development of the country by fostering entrepreneurship and
generating largest employment opportunities at comparatively lower capital cost, next only to
agriculture. MSMEs are complementary to large industries as ancillary units and this sector
contributes significantly in the inclusive industrial development of the country. The MSMEs
are widening their domain across sectors of the economy, producing diverse range of products
and services to meet demands of domestic as well as global markets.
Ministry of Micro, Small & Medium Enterprises envisions a progressive MSME sector by
promoting growth and development of the Sector, including Khadi, Village and Coir Industries,
in cooperation with concerned Ministries/Departments, State Governments and other
Stakeholders, through providing support to existing enterprises, adopting cutting edge
technologies and encouraging creation of new enterprises.
A number of statutory and non-statutory bodies work under the aegis of the Ministry of MSME.
These include the Khadi Village Industries Commission (KVIC) and the Coir Board Besides
National Small Industries Corporation (NSIC), National Institute for Micro, Small and Medium
Enterprises (NIMSME) and Mahatma Gandhi Institute for Rural Industrialisation (MGIRI).
The Ministry of MSME runs various schemes aimed at financial assistance, technology
assistance and upgradation, infrastructure development, skill development and training,
enhancing competitiveness and market assistance of MSMEs.
The study plays a vital role in the economic and social development of the country. The primary
purpose of this research work was to assess the challenges of Micro and Small Scale Enterprises
(MSMEs) face in marketing. The study was confined to Jhansi area in Coimbatore district.
Where a sample of 25 Micro Small and Medium scale Enterprises was adopted. Data was
obtained through Distribution of questionnaires. From the research findings, it emerged that
MSMEs are not getting financial supports and also marketing problems. The study also relieved
that an unstable macroeconomic environment was hindering micro and small enterprises sector
growth.
TABLE OF CONTENT
Chapter No. Chapter Name Page No.

Certificate
Declaration
Acknowledgement
Executive Summary
Chapter 1 Introduction 1
 History of MSME 1
 Mandate of the ministry of MSME 6
 Organisational Structure of MSME 7
 Recent policy initiative of MSME 9
 Role of MSME in Indian Economy 12
 Statutory bodies & other bodies under the MSME 18
ministry 20
 Major schemes of MSME 28
 Problem of MSME in India
Chapter 2 Review of Literature 30

Chapter 3 Research Methodology 33
 Limitation of study 33
 Objective of the study 34
Chapter 4 Data analysis & Interpretation 35

Chapter 5 Findings 45
Conclusion & Suggestion 46
Questionnaire 47
Bibliography 50
Chapter: -1
Introduction
1. History of MSME (Micro, Small, Medium Enterprises): -
The concept of small business was originated more than 4,000 years ago since the ancient
cultures and the business was flourished among all like the Egyptians, Arabs, Babylonians,
Jews, Greeks and Romans etc. Earlier at beginning of the history of small business; the cottage
industries had thrived the period through the production of goods at home carried out by a
workman skilled in the craft on his own responsibility to finish goods in time and sell
himself/herself directly in the market (The History: Cottage Industry, Concept of Small
Business, 2015). But with the passage of time there observed a major resurgence in small scale
industries throughout the world. In India, the British government destroyed the handicraft
business and did not care to provide an alternative source of employment to people. As a result,
there took place a large ruralisation and de-industrialization in country so to tackle this situation
the Gandhian concept of Swaraj played an important role in the growth and development of
Village and Khadi Industries. After independence, the first comprehensive industrial policy
was announced by the Government of India (GOI) i.e. the Industrial Policy Resolutions (IPRs)
in 1948 which identified the critical role of cottage and small scale industries and advocated
that the expansion of these industries would depend on the factors like supply of raw materials,
power supply at low rates, providing technical advice and organized marketing to products.
Later on, with the advent of planning period the Industries (Development and Regulation) Act
was passed in 1951 which was treated as an undertaking for small scale and cottage industries.
Both the IPRs and this act laid the foundation stone of small scale sector on a wider scale and
assigned a pivotal role in the national economy (Nath, 2014). Again, in 1952-53 the five boards
were set-up for handloom, handicrafts, coir, silk and village industries on the recommendations
of the Cottage Industries Board to expand the areas of small industrial sector. With these
recommendations the Government of India formed the Small-Scale Industries Board (SSIB)
and Central Small Industries Organization (CSIO) in 1954-55 which defined SSIs as, “a unit
employing less than 50 persons, if using power and less than 100 persons without the use of
power, and with capital assets not exceeding Rs. 5 lacs” (Laskar, 2010). After the First Five
Year Plan, the Second Industrial Policy Resolution was announced in 1956 in Second Five
Year Plan period which was based on P.C. Mahalanobis model of industrialization. This
1
resolution further made provisions for the development of cottage and small scale industries
by limiting the volume of production of large scale industries, providing direct subsidies and
establishing industrial estates for them (Raju, 2008). Consequently, these measures somehow
enhanced the competitiveness of the small sector through modernization in technique of
production, facility of rural electrification at affordable prices and credit facilities.
Besides these, several other changes were also made when the New Industrial Licensing Policy
was announced in 1970 which removed some demerits of the Industries (Development and
Regulation) Act, 1951 and involved that investment up to Rs. 1 crore in industries were
exempted from license requirement. Subsequently, when the Janata Government came into
power in 1977 then the New Industrial Policy was announced in which the major changes were
took place in the operation of SSIs (Rao, 1979). Despite, all these adopted policies many ups
and downs were seen in the development of small industries till 1980s but no significant
improvement was observed due to the stranglehold of bureaucratic rigidity, excessive
regulations and ignorance. With the changing market dynamics, the New Economic Policy was
announced in 1991 with the objective to “unshackle the Indian industries economy from the
cobwebs of unnecessary bureaucratic control” (Nath, 2014). The reform period served as a
turning point for the Indian economy and enabled the Central Government to take necessary
initiatives in the areas of industrial licensing, foreign investment, technological enhancement,
dissolution of sick public sector undertakings, finance and credit support, provision to import
of raw materials and equipment’s, liberalization the world economy with the domestic
economy and many more. In July, 1993 the Reserve Bank of India announced one special
measure in the sphere of small and medium enterprises i.e. to meet the credit requirement of
village and tiny industries by commercial banks. Later on, year by year the Gupta Study Group
was constituted in May, 1999 with the objective to provide maximum support and protection
to tiny units, somewhat lesser support to small scale units and no facilities to the medium
enterprises except credit (Evolution of Small Scale Industries in India, 2006).
2
Table 1.1: Changes in the Definition of SSIs in terms of Investment Limits
Serial No. Year Investment Limits in Plant and Additional Conditions

Machinery
1 1955 Upto Rs. 5 Lakh Less than 50/100

persons with/without
power
2 1960 Upto to Rs. 5 Lakh No conditions

3 1966 Upto Rs. 7.5 Lakh No conditions
4 1975 Upto Rs. 10 Lakh No conditions
8 1997 Upto Rs. 3 Crore No conditions
9 2000 Upto Rs. 1 Crore No conditions
10 2006 Upto Rs.5 Crore No conditions
The table 1.1 is carrying the definition of small scale industries in terms of investment limit
that changed from time to time by the GOI up to 2006 which is compiled from 67 various
sources. It is observed in table that from 1955 to 2006 the investment limit in plant and
machinery has continuously risen from Rs. 500,000 to Rs. 5 crores. The investment limit was
increased whenever required in order to widen the functioning of small industrial sector at
macro level. After 1999, the concept of SSIs was again revised in 2006 under the MSMED Act
enacted by the Government of India and was renamed as Micro, Small and Medium Enterprises
(MSMEs). This act seeks to facilitate the development of MSMEs and to enhance their
competitiveness in domestic as well as in global market. The act for the first time legally
recognised the word enterprise and divided sector in three tiers i.e. Micro, Small and Medium
Enterprises. Apart from this, the act aims to impart greater vitality and growth impetus to the
MSMEs in terms of output, employment, exports and import a competition based environment
by removing barriers and establishing regulatory and legal framework such as credit facilities,
grants, development of skill in employees, management and entrepreneurs, provisioning for
marketing assistance or infrastructure facilities, cluster development approach, worker related
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facilities and other basic needs of industry like power, water, transportation, adequate supply
of raw materials and several others (RBI Report, 2013).
Table 1.2: Fixed Investment Limits in Manufacturing & Service Sector adopted in Act
2014
Manufacturing Sector
Enterprises Investment in plant & machinery

Micro Enterprises Does not exceed Rs. 25 lacs.
Small Enterprises More than Rs. 25 lacs but does not exceed Rs. 5
crores.
Medium Enterprises More than Rs. 5 crores but does not exceed Rs. 10
crores.
Service Sector
Enterprises Investment in equipment’s

crores.
crores.
On the other side, enterprises under this act have been broadly categorized into two parts i.e.
manufacturing enterprises and service enterprises. In both categories, the investment limits are
fixed for micro, small and medium enterprises which are shown in table 1.2. This new act
replaced and merged all the earlier adopted acts and bodies it and is expected to bring major
structural change in Indian manufacturing sector. Since independence, this act for the in first
time focus on number of issues which is granted as challenge to enhance the competitiveness
of micro, small and medium enterprises in an environment of economic liberalization and
globalization. Not only these in a concerted effort to promote uninhibited growth and
development of SMEs; the government has also established a number of departments,
corporations and promotional agencies at Central and State level to help in setting-up of
industries.
These development agencies are the National Small Industries Corporation (NSIC), National
Bank for Agricultural and Rural Development (NABARD), Small Industries Development
Bank of India (SIDBI), National Institute for Small Industries Extension Training (NISIET),
Industrial Development Bank of India (IDBI), Industrial Finance Corporation of India (IFCI),
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Industrial Credit and Investment Corporation of India (ICICI), Khadi and Village Industries
Commission (KVIC), Council of Scientific and Industrial Research (CSIR), India Investment
Centre (IIC), Regional Rural Banks (RRBs which especially increased the scope of village and
cottage industries) and several others (Laskar, 2010). On the other hand, the District Industries
Centre (DICs) is also functioning to promote small, tiny, cottage and village industries in a
particular district and to avail them all necessary services and facilities. Till now there are 422
DICs have been set-up which covers 431 districts of the country leaving out the metropolitan
cities and some new districts. Under the MSMED Act, 2006 the registered micro, small and
medium enterprises are those enterprises which certified (apply for license) themselves with
the DICs and unregistered are those which do not apply for license in District Industries Centre
(Kushwaha, 2009).
Subsequently, to focus more on this sector for the first time in Indian history the All India
Census of MSME was conducted in 1973-74 in respect of 2.58 lac units which were registered
up to 30 November, 1973. After then, the second census was conducted during 1990-91 in
respect of 9.87 lac units registered up to 31 March, 1988. Later on, the most ambitious third
census was conducted during 2002-03 with 2001-02 as a reference year where it has covered
around 13.75 lac registered units and 91.46 lac unregistered units (Das, 2011). The latest census
conducted on Micro, Small and Medium Enterprises i.e. fourth with reference year of 2006-07
where the data was collected up to 2009 and the results were published in a year 2011-12 in
respect of 26.1 million industries (Fourth All India Census of MSMEs, 2012). After fourth
census the need for change in definition of MSMEs was raised by various stakeholders,
organisations and associations from time to time because of dynamic change in market
situation. Hence, in 2011-12 a committee constituted by Reserve Bank of India to consider the
changes in price index and cost of inputs from the existing limit and finally in the budget of
2014-15 the limit was increased which is shown in table 1.3.
5
Table 1.3: Increase in Investment Limits of Manufacturing & Service Sector according
to MSME amendment bill 2015 and above
Manufacturing Sector
Enterprises Investment in plant & machinery

crores.
crores.
Service Sector
Enterprises Investment in equipment’s

crores.
crores.
The investment in plant and machinery of micro enterprises has increased from Rs. 25 lacs to
Rs. 50 lacs and simultaneously the fixed limit in small and medium enterprises were also
increased from the previous fixed limits. With this revised definition the Department related
Parliamentary Standing Committee (DRPSC) on industry suggested that the small and medium
enterprise definition should be revised every after five years and if needed the act should be
amended to make changes in other prospects. So, the programmes, policies and activities that
have been adopted in favour of small and medium enterprises are functioning somehow well
but not fully due lack of seriousness and execution. Despite all, the MSMEs are very important
sector in India and for its proper development every citizen or official organization and
government has to become very clear in its decisions.
2. Mandate of the ministry of MSME: -The mandate of MSME as contained in

the enabling act can be summarised as follows-
 Stimulating, monitoring coordinating the development of the MSMEs sub-
sector; initiating and clarify the policy ideas for small and medium enterprises
growth and development; promoting and facilitating development programmes,
instruments and support services to accelerate the development and
modernisation of MSME operations.
6
 Serving as a leader for rural industrialisation, poverty reduction, job creation
and enhanced livelihood; linking MSMEs to internal and external sources of
finance, appropriate technology, technical skills as well as to large enterprises.
 Promoting and providing access to industrial infrastructural such as layouts,
controlled, industrial parks.
 Working in contact with other institutions in both public and private sector to
create a good enabling environment of business in general and also
intermediating between MSMEs and government
3. Organisational Structure of MSME: -
MSME are very typical in nature of functioning, management and governance because of its
size and financial strength. Most of the MSMEs are family owned businesses across the world.
Therefore, their functioning is quite limited to the leadership of the head of the household.
There is hardly any architecture found in its structure. Most of the MSMEs have a simple, flat
structure rather than a hierarchal one. It is usually a ‘one man shows’ and this single person,
the entrepreneur or the owner plays the role of marketing, HR, as well as finance head. Only
those MSMEs that are also involved in manufacturing may have a separate functional head to
inspect the day-to-day production activity. But even in this case, the owner has complete
involvement in the same and remains the final decision maker. Only when a firm grows to
become medium sized from small and become large from medium sized, the structure gets
more and more hierarchal and less flat. Organizational structure of MSMEs also depends on
the type of business that they are involved in. For example, trading firms have a flatter structure
as compared to that at a manufacturing firm. Most innovative firms have more developed
organizational structures — in terms of number of departments as compared to a routine
activity firm.
Organizational structure concerns with work division (the distribution of tasks and activities)
and coordination mechanisms (this includes standardization and formalization).
Studies on MSME organizational structures have also proved that the “small firms are informal,
unstructured and centralized” is untrue. Small firms that exhibit specialization and centralized
decision making have a more complex structure.
7
Small Scale and Cottage
Industry
Small Scale Cottage

Industry Industry
Rural Small Urban Small

Scale Industry Scale Industry
Short Duration Long Duration Short Long

Making of Manufacturing Duration Duration
Sugar & of Shoes, Mat Brick Making, Leather,
Jiggery, Rice Carpet Hosiery, etc. Shop, etc.
Rural Small Urban Small

Industry Scale Industry
Short Long Short Long

Duration Duration Duration Duration
Making of Working of Making of Making of
Mat, Basket, Black Smith, Kite & Toys, vessel,
Rope, Yarn Potter, Cloths carpenter,
etc. Weaver, Oil colouring Handicraft
Seller, Gold work Statue
Smith, etc. making, etc.
8
The above structure shows that the cottage and small scale industries constitute a timeless part
of the rich and the cultural heritage of India. The element of art and craft present in these
industries makes it a potential sector for the upper segments of domestic market as well as
global.
The SSI and cottage industries involve traditional workers, craftsman and artisans who have
inherited their work as an art from their previous generations. Their products include clothes
such as khadi, leather, silk, cotton, wool and others. Their products also include many precious
items like jewellery, ornaments, statues, idols, gems, stones and also edible items like spices,
oils and honey. All items have huge demands not only within India but also in foreign markets.
4. Recent policy initiatives of MSME: -

During the year 2015, Ministry of MSME launched various initiatives to improve the ease of
doing business and to make Micro, Small and Medium Enterprises more globally competitive.
These initiatives include ease of registration of the business in the form of Udyog Aadhar
Memorandum, Framework to revive sick MSMEs, promoting innovation in rural
entrepreneurship through ASPIRE scheme, fund for regenerating traditional industries,
financial support in the form of credit guarantee and credit linked capital subsidy. Some of the
programmes launched during the year include which is given below-
 Udyog Aadhaar Memorandum (UAM): - The Ministry in September-2015 under the

MSME Development Act, 2006 has notified that every MSME unit shall file Udyog Aadhaar
Memorandum (UAM). This is a path breaking step to promote ease of-doing-business for
MSMEs in India as the UAM replaces the filing of Entrepreneurs’ Memorandum with the
respective States. While some of the States had made the process online, either by themselves
or through the portal created by this Ministry, several States were still relying on the manual
way of filing EM. The cumbersome filing of EM has now been dispensed with and the
entrepreneurs in the MSME sector just need to file online, a simple one page UAM on
http://udyogaadhaar.gov.in to instantly get a unique Udyog Aadhaar Number (UAN). The
information sought is on self-certification basis and no supporting documents are required at
the time of online filling of UAM.
The UAM can be filed online by individuals themselves in case they have an Aadhaar Number.
However, in all exceptional cases, including those of not having an Aadhaar Number, the UAM
9
can be filed in offline mode (i.e. on paper form), with the General Manager (GM) of the
concerned District Industries Centre (DIC).The UAM has emerged from the vision of
Honourable Prime Minister of India shared with the Nation through “Mann Ki Baat” telecast
on 03-10-2014 and the recommendations for Universalization of Registration in the Report of
the Kamath Committee on Financial Architecture of MSME sector. Wide-ranging consultation
exercise has been done in the matter in the National Board of MSMEs and the Advisory
Committee for MSME Act. It is expected that this simplified one-page memorandum to be
filed online shall unlock the potential of MSMEs, besides improving our international ranking
in Doing Business Index. Within a short time of three months, more than 95,650 UAMs have
been filed in the country.
The Union Minister for Micro, Small and Medium Enterprises, Shri Kalraj Mishra address a press
conference on “Udyog Aadhar Memorandum” a simplified registration format for MSMEs, in New
Delhi on October 06, 2015.
 Prime Minister’s Employment Generation Programme (PMEGP): - PMEGP is the

flagship programme of the government offering credit linked subsidy to establish new
enterprises for generating continuous and sustainable employment opportunities in
Rural and Urban areas of the country.
 Rs. 860.51 crore has been released by the Ministry as margin money under PMEGP
out of which Rs. 528.32 crore has already been disbursed by the banks.
 24126 new enterprises providing employment to 170983 persons have been benefited
under the Scheme.
 There is more than 50% increase over the previous year in terms of funds disbursed by
the banks, no of projects with funds disbursed and the employment generated.
 A Scheme for Promotion of Innovation, Rural Industry and Entrepreneurship

(ASPIRE): - ASPIRE has been launched on 16.03.2015 with an objective to set up a
network of technology centres, incubation centres to accelerate entrepreneurship and
also to promote start-ups for innovation and entrepreneurship in rural and agriculture
based industry with a fund of Rs.210 crores.
 The planned outcomes of ASPIRE are setting up Technology Business Incubators
(TBI), Livelihood Business Incubators (LBI) and creation of a Fund of Funds for such
initiatives with SIDBI.
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 1st LBI set up in April-2015 under ASPIRE within a month of launching the Scheme.
The first batch of 107 youth has been trained and skilled through it.
 19 LBIs have been approved till September 2015 and another 9 LBIs & 2 TBI is ready
to be approved.
 Scheme of Fund for Regeneration of Traditional Industries (SFURTI): - The

objectives SFURTI is to organize the traditional industries and artisans into clusters to
make them competitive and provide support for their long term sustainability by way
of enhancing the marketability of products, improving the skills of artisans, making
provision for common facilities and strengthening the cluster governance systems.
 The Scheme guidelines of SFURTI have been revamped in 2015 and the Scheme has
taken giant strides in 2015. Funds to the tune of Rs.62 Crore have been sanctioned under
the Scheme in 2015as against Nil in 2014.
 68 clusters have already been approved in 2015 itself against the target of 71 clusters
during 12thPlan period with more than a year of the plan period to spare.
The Union Minister for Micro, Small and Medium Enterprises, Shri Kalraj Mishra addressing
at the inauguration of the National Level Workshop on Revamped SFURTI, in New Delhi on
March 22, 2015.
 Lean Manufacturing Competitiveness Scheme (LMCS): - LMCS is being

implemented across the country to enhance the competitiveness of manufacturing
MSMEs. The Objective of the Scheme is to enhance the manufacturing competitiveness
of MSMEs through application of various Lean Manufacturing Techniques.
 188 New Clusters identified and selected for LM (Lean manufacturing) interventions.
 Lean manufacturing Interventions have been initiated in 359 Units.
 Organised 63 Awareness Programmes across the country.
 Credit Guarantee Trust Fust for Micro and CGTMSE Scheme: - CGTMSE was
set up to strengthen credit delivery system and facilitate flow of credit to the MSE
sector. The Credit Guarantee under CGTMSE seeks to reassure the lender that, in the
event of a MSE unit, which availed collateral free credit facilities, fails to discharge its
liabilities to the lender; the CGMSE would make good the loss incurred by the lender
up to 85 per cent of the credit facility.
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During the current financial year (April to October 2015), total number of proposals
approved under the scheme was 2,31,774 involving a guarantee amount of Rs. 11,446
crores.
 Credit Linked Capital Subsidy Scheme (CLCSS) for Technology Upgradation: -

CLCSS aims at facilitating technology upgradation of Micro and Small Enterprises
(MSEs) by providing 15% capital subsidy (limited to maximum Rs.15 lakhs) for
purchase of Plant & Machinery. Maximum limit of eligible loan for calculation of
subsidy under the scheme is Rs.100 lakhs. Presently, more than 1500 well
established/improved technologies under 51 sub-sectors have been approved under the
Scheme.
During the current financial year (April to October 2015), 1,195 units benefitted and
total subsidy released to the tune of Rs. 75.57 crore.
ROLE OF MSMEs IN INDIAN ECONOMY

The MSME sector plays a significant role in the Indian economy. A catalyst for socio-economic
transformation of the country, the sector is critical in meeting the national objectives of
generating employment, reducing poverty, and discouraging rural-urban migration. These
enterprises help to build a thriving entrepreneurial eco-system, in addition to promoting the use
of indigenous technologies. The sector has exhibited consistent growth over the last few years,
but it has done so in a constrained environment often resulting in inefficient resource
utilization. Of the many challenges impeding the growth and development of MSMEs,
inadequate access to financial resources is one of the key bottlenecks that make these
enterprises vulnerable, particularly in periods of economic downturn.
Exclusive credit Plans for Micro Small and Medium Enterprise entails providing lower rate of
interest for growing business units and offering them access to banking services at low rate of
interest, quick processing and servicing.
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Indian Micro Small and Medium Enterprises (MSME) sector has emerged as a highly vibrant
and dynamic sector of the Indian economy over the last five decades. SMEs not only play crucial
role in providing large employment opportunities at comparatively lower capital cost than large
industries but also help in industrialization of rural areas. MSMEs are complementary to large
industries as ancillary units and this sector contributes enormously to the socio-economic
development of the country. The Sector consisting of 36 million units, as of today, provides
employment to over 80 million persons. The Sector through more than 6,000 products
contributes about 8% to GDP besides 45% to the total manufacturing output and 40% to the
exports from the country. The MSME sector has the potential to spread industrial growth across
the country and can be a major partner in the process of inclusive growth.
MSMEs also play a significant role in Nation development through high contribution to
Domestic Production, Significant Export Earnings, Low Investment Requirements, Operational
Flexibility, Location Wise Mobility, Low Intensive Imports, Capacities to Develop Appropriate
Indigenous Technology, Import Substitution, Contribution towards Defence Production,
Technology – Oriented Industries, Competitiveness in Domestic and Export Markets thereby
generating new entrepreneurs by providing knowledge and training.
Despite their high enthusiasm and inherent capabilities to grow, MSMEs in India are also facing
a number of problems like sub-optimal scale of operation, technological obsolescence, supply
chain inefficiencies, increasing domestic & global competition, working capital shortages, not
getting trade receivables from large and multinational companies on time, insufficient skilled
manpower, change in manufacturing strategies and turbulent and uncertain market scenario. To
survive with such issues and compete with large and global enterprises, SMEs need to adopt
innovative approaches in their operations. MSMEs that are innovative, inventive, international
in their business outlook, have a strong technological base, competitive spirit and a willingness
to restructure themselves can withstand the present challenges and come out successfully to
contribute 22% to GDP. Indian MSMEs are always ready to accept and acquire new
technologies, new business ideas and automation in industrial and allied sectors.
1. Performance of the MSME sector: - MSME plays dual role of providing employment
and industrialization of rural/backward areas, thereby reducing regional imbalance and
equitable distribution of national income. MSMEs is harmonizing to large industries as
supplementary units, which adds to socio -economic development. It consists of 36 million
units, providing employment over 80 million persons with 8% contribution to GDP
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Performance of MSME, Employment and Investments
S.No. Year Total working Employment (in Market value of fixed
enterprises (in lakh) lakh) assets (in crore)
1 2009-10 361.7 805.23 868,543.79
2 2010-11 377.36 842.00 920,459.84
3 2011-12 393.7 880.84 977,114.72
4 2012-13 410.8 921.79 1,038,546.08
5 2013-14 428.73 965.15 1,105,934.09
6 2014-15 447.64 1011.69 1,182,757.64
7 2016-17 447.54 1061.4 1,268,763.67
8 2017-18 488.86 1114.29 1,363,700.54
Sources: Annual report 2017-18, GOI, Ministry of MSME
CAGR= (End value/Begin value)1/n-1
The above table shows that the total working enterprise in MSME grown at CAGR 4.39% from
2009-10 to 2017-18, there is fluctuation in annual growth rate and during 2016-17 negative
growth in total working enterprises. Employment growth in CAGR 4.75% from 2009-10 to
2017-18, there is continuous growth in MSME employment and MSME providing more
employment opportunities over last 7 years. Market value of fixed asset growth in CAGR
stands at 6.65% from 2009-10 to 2017-18; market value increased over a period of time.
Performance of manufacturing output of MSME in GDP

Gross value of Share of MSME sector in total Share of
output of GDP % MSME
MSME in manufacturing
manufacturing Service output in total
S.NO. Year sector (in Manufacturing sector manufacturing
Total
crore) sector MSME MSME output (%)
1 2010-11 1198818 7.73 27.40 35.13 42.02
2 2011-12 1322777 7.81 27.60 35.41 41.98
3 2012-13 1375589 7.52 28.60 36.12 40.79
4 2013-14 1488352 7.45 28.60 36.05 39.63
5 2014-15 1653622 7.39 29.30 36.69 38.50
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6 2015-16 1788584 7.27 30.70 37.97 37.47
7 2016-17 1809976 7.04 30.50 37.54 37.33
Source: - Annual report 2017-18, GOI, Ministry of MSME
The above table shows that the gross value of output of MSME manufacturing sector (in crore)
grown at CAGR of 7.17% during 2010-11 to 2016-17 and the growth rate highly fluctuated.
Share of manufacturing sector growth rate to GDP with CAGR of negative -1.53% during
2010-11 to 2016-17 and indicates MSME manufacturing industry contribution to GDP is down
over 6 years of period. Share of service sector growth rate to GDP with CAGR of 1.82% during
2010-11 to 2016-17 and indicates MSME service industry contribution to GDP is growing
lower over 6 years of period.
2. Registration of new MSME: - At the time of globalisation there has been creative and
innovative ideas for registration of new MSME with the help of Udyog Aadhaar.
The registration process of new MSME is given below: -
I. Aadhaar Number- 12 digit Aadhaar number issued to the applicant should be filled in
the appropriate place which is given on site.
II. Name of Owner- The applicant should fill his/her name strictly as mentioned on the
Aadhaar card issued by UIDAI. E.g. If Pragati Raaj Singh has her name as Pragati R.
Singh, the same should accordingly be entered if the name does not match with the
Aadhaar number, the applicant will not be able to fill the form further.
To Validate Aadhaar: -
a) Validate Aadhaar- The applicant must click on Validate Aadhaar button for
verification of Aadhaar, after that only user can fill the form further.
b) Reset- The applicant can click on reset button to clear the field of Aadhaar number and
Name of the owner for different Aadhaar.
OTP will send to your mobile registered with UIDAI.
III. Social category- The applicant may select the social category (General, SC, ST or
OBC). The proof of belonging to SC, ST, or OBC may be asked by appropriate
authority, if and when required.
IV. Gender-The applicant can select gender of Entrepreneur.
V. Name of Enterprise- The applicant must fill the name by which his/her Enterprise is
known to the customer/public and is legal entity to conduct business. One applicant can
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have more than one enterprises doing business and each one can be registered for a
separate Udyog Aadhaar and with the same Aadhaar number as Enterprise 1 and
Enterprise 2 etc.
Combination of the same Aadhaar number and Enterprise name can be added second
times. Only additional detail can be added or deleted at the time of editing.
VI. Physically Handicapped- The applicant can select physically handicapped status of
entrepreneur.
VII. Type of Organisation- The applicant may select from the given list the appropriate
type of the organisation for his/her enterprise. The applicant must ensure that he/she is
authorised by the legal entity (enterprise being registered for Udyog Aadhaar) to fill
this form. Only one Udyog Aadhaar number shall be issued for each enterprise.
VIII. PAN Number- The applicant have to enter PAN number in case of cooperative, private
limited and limited liability partnership. It will be optional in remaining type of
Organisation.
IX. Location of Plant- The applicant may add multiple plant location in one registration
by clicking add plant button.
X. Official Address- The applicant should fill in the appropriate field the complete postal
address of the enterprise including State, District, Pin code, Mobile number and Email.
XI. Date of Commencement- The date in the past on which the business entity commenced
its operations may be filled in the appropriate field.
XII. Previous Registration Details (if any) – If the applicant’s enterprise, for which the
Udyog Aadhaar is being applied, is already issued a valid EM-I/II by the concerned
GM(DIC) as per the MSMED Act 2006 or the SSI registration prevailing prior to the
said act, such number may be mentioned in the appropriate place.
XIII. Bank Details- The applicant must provide his/her bank account number used for
running the enterprise in the appropriate place. The applicant must also provide the
IFSC code of the bank branch where his/her account exists. The IFSC code now a days
printed on the cheque books issued by the bank. Alternatively, if the applicant knows
the name of the bank and the branch where his/her account is there, the IFSC code can
be found from website of the respective bank.
XIV. Major Activity: - The major activity i.e. “Manufacturing” or “Service” may be chosen
by the enterprise for Udyog Aadhaar. If your enterprise involves in both type of
activities and if major work involves in service sector and small portion of activity
involves in manufacturing, then select your major activity type as “Services” and if
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major works involves in manufacturing and small portion of activity involves in service
sector then select major activity type as “Manufacturing”.
XV. National Industry Classification Code: - The applicant may choose multiple national
industrial classification-2008 (NIC) codes to includes all their activities. Which means
user can select multiple NIC code of Manufacturing and Service sector by clicking “add
more” button. If you want to add Manufacturing the select “Manufacturing” radiobutton
and keep on adding by clicking “add more” button otherwise if you want to add Service,
then select “Services” radiobutton and keep on adding by clicking “add more” button.
The NIC codes are prepared by the Central Statistical Organisation (CSO) under the
ministry of statistics and program implementation, Government of India.
The applicant may be NIC-2008 codes searching facility to avoid 3 steps selection
process.
XVI. Person Employed: - The total number of people who are directly been paid
salary/wages by the enterprise may be mentioned in the appropriate field.
XVII. Investment in Plant and Machinery/Equipment: - While computing the total
investment the original investment (purchase value of items) is to be taken into account
excluding the cost of pollution control, research and development, industrial safety
devices such other items as may be specified, by notification of RBI. If an enterprise
started with a set of plant and machinery purchased in 2008 worth Rs.70 lakhs has
procured additional plant and machinery in the year 2013 worth Rs.65 lakhs, then the
total investment in plant and machinery may be treated as Rs.135 lakhs.
XVIII. DIC: -The applicant based on the location of the enterprise, has to fill in location of
DIC. This column will be active and show option only when there are more than one
DIC in the district. In fact, if there is only one DIC in the district system will
automatically register you in the same DIC.
XIX. Submit: - The applicant must click on submit button to generate OTP which will be
sent to email id mentioned for registration.
XX. The applicant has to enter OTP received on mobile (linked with Aadhaar) second time.
XXI. Enter Captcha: - The applicant must enter captcha before clicking final submit button
 Option for registration without Aadhaar: - An applicant or the authorised signatory

who is not yet enrolled for Aadhaar enrolment shall have to apply and in case he or she
is entitled to obtain Aadhaar as per sec. 3 of the Aadhaar act such individual may visit
any Aadhaar enrolment centre to get enrol for Aadhaar.
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Provided that till the time Aadhaar is assigned to the individual, UAM registration shall
be filled by the concerned DIC or MSME-DI on behalf of such enterprise, subject to
the production of the following documents as alternative and viable means of
identification.
A) I) If he has enrolled, his Aadhaar enrolment ID slip; or
II) A copy of his request made for Aadhaar enrolment.
B) Any of the following documents, namely: - Bank passbook, voter ID card, Passport,
driving license, PAN card, employee photo identity card issued by the government.
Statutory bodies and other bodies under the MSME Ministry
1. Khadi and Village Industries Commission (KVIC): - The Khadi & Village Industries
Commission (KVIC), established under the Khadi and Village Industries Commission Act,
1956, is a statutory organisation engaged in promoting and developing khadi and village
industries for providing employment opportunities in rural areas, thereby strengthening the
rural economy. The KVIC has been identified as one of the major organisations in the
decentralized sector for generating sustainable rural non-farm employment opportunities at
low per capita investment.
2. Coir Board: - The Coir Board is a statutory body established under the Coir Industry Act,
1953 for promoting overall development of the coir industry and improving the living
conditions of the workers engaged in this traditional industry. The activities of the Board
for development of coir industries, inter-alia, include undertaking scientific, technological
and economic research and development activities; developing new products & designs;
and marketing of coir and coir products in India and abroad. It also promotes co-operative
organisations among producers of husks, coir fibre, coir yarn and manufacturers of coir
products.
3. National Small Industries Corporation Limited(NSIC): - The National Small Industries
Corporation (NSIC) Ltd. Was established in 1955 by the Government of India with a view
to promote, aid and foster the growth of small scale industries in the country. It provides a
variety of support services to micro and small enterprises by catering to their different
requirements in the areas of raw material procurement; product marketing; credit rating;
acquisition of technologies; adoption of modern management practices, etc. The NSIC is
directly operating different programmes by a dedicated team of professionals at all levels
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and operates through 142 offices located all over India and one office located at
Johannesburg (South Africa).
4. Mahatma Gandhi Institute for Rural Industrialisation (MGIRI): - A national level
institute named MGIRI has been established at Wardha, Maharashtra as a society under
Societies Registration Act, 1860 by revamping Jamnalal Bajaj Central Research Institute
has in association with IIT, Delhi for strengthening the R& D activities in khadi and village
industry sectors. The main objectives of the institute are as under:
· To accelerate rural industrialization for sustainable village economy so that KVI
sector co-exists with the main stream.
· Attract professionals and experts to Gram Swaraj
· Empower traditional artisans
· Innovation through pilot study/field trials
· R&D for alternative technology using local resources
During 2010-11, it is proposed to initiate action on handholding support to 68 model
enterprises in bioprocessing, chemical, energy, rural crafts and solar garments
sets and 21 machines/processes/services would be improved.
5. National Institute for Micro, Small and Medium Enterprises (NIMSME): - National
Institute for Micro, Small and Medium Enterprises was established in 1960 at Hyderabad.
National Institute for Micro, Small and Medium Enterprises (NIMSME) is engaged in
developing training modules; undertaking research & training; and providing consultancy
services for entrepreneurship development & promotion of MSMEs, including
enhancement of their competitiveness. NIMSME proudly mentions to mention that during
the last three years it has offered 4,931 training programmes benefiting 1,63,823
participants consisting of prospective/existing entrepreneurs and executives besides
undertaking 31 research and consultancy projects, attaining a cumulative growth of 12,040
training programmes, 4,00,505 participants and 885 projects.
Over the years, NIMSME has expanded its reach to embrace the entire developing world.
In the last three years, it has offered 64 programmes benefiting 1,221 executives of the
developing countries. So far, 8,776 executives from 140 developing countries have profited
from its expertise, knowledge and resources.
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Major Schemes OF MSME
1. Performance & Credit Rating Scheme: - The scheme is being implemented through
National Small Industries Corporation (NSIC) Limited. The main objective of the
scheme is to provide a trusted third party opinion on the capabilities and
creditworthiness of the MSEs so as to create awareness amongst them about the
strengths and weakness of their existing operations. Rating under the scheme is being
carried out through empanelled rating agencies i.e. CRISIL, CARE, ONICRA,
SMERA, ICRA and Brickwork India Ratings. Under this Scheme, rating fee payable
by the micro & small enterprises is subsidized for the first year only and that is subject
to maximum of 75% of the fee or Rs. 40000/-, whichever is less.
2. Marketing Assistance Scheme: - The scheme is being implemented through National
Small Industries Corporation (NSIC) Limited. The main objectives of the scheme is to
enhance the marketing competitiveness of MSMEs; to provide them a platform for
interaction with the individual/institutional buyers; to update them with prevalent
market scenario and to provide them a form for redressing their problems. MSMEs are
supported under the Scheme for capturing the new market opportunities through
organising/participating in various domestic & international exhibitions/ trade fairs,
Buyer-Seller meets intensive campaigns and other marketing events.
3. International Cooperation (IC) Scheme: - Technology infusion and/or upgradation
of Indian micro, small and medium enterprises (MSMEs), their modernisation and
promotion of their exports are the principal objectives of assistance under the Scheme.
The Scheme would cover the following activities:
(a) Deputation of MSME business delegations to other countries for exploring new areas
of technology infusion/upgradation, facilitating joint ventures, improving market of
MSMEs products, foreign collaborations, etc.;
(b) Participation by Indian MSMEs in international exhibitions, trade fairs and buyer seller
meets in foreign countries as well as in India, in which there is international
participation;
(c) Holding international conferences and seminars on topics and themes of interest to the
MSME. IC Scheme provides financial assistance towards the airfare and space rent of
entrepreneurs. State/Central Government Organisations, Industry/Enterprise
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Associations and Registered Societies/Trusts and Organisations associated with the
promotion and development of MSMEs are eligible to apply.
4. Assistance to Training Institutions Scheme: - The Scheme envisages financial
assistance for establishment of new institutions (EDIs), strengthening the infrastructure
of the existing EDIs and for supporting entrepreneurship and skill development
activities. The assistance shall be provided to these training institutions in the form of
capital grant for creation/strengthening of infrastructure and programme support for
conducting entrepreneurship development and skill development programmes.
Maximum assistance for creation or strengthening of infrastructure will be Rs. 150
lakhs on matching basis, not exceeding 50% of project cost. However, for the North
Eastern region (including Sikkim), Andaman & Nicobar and Lakshadweep, the
maximum assistance on matching basis would be Rs. 270 lakhs or 90% of project cost,
whichever is less. Any State/Union Territory
Government, Training Institutions, NGOs and other development agencies can apply
for assistance for creation or strengthening of infrastructure. Training Institutions who
wish to conduct training programmes under the Scheme will have to enrol themselves
with any of the three National Level EDIs of the Ministry viz, NIESBUD, Noida; IIE
Guwahati and NIMSME, Hyderabad. Maximum assistance per trainee per hour for
entrepreneurship development and skill development programmes is Rs 50 (Rs. 60 for
NER, A&N and Lakshadweep).
5. Schemes for Khadi & Village Industries Sector: -
 Prime Minister’s Employment Generation Programme (PMEGP)- PMEGP is a

credit linked subsidy scheme of the Ministry, implemented through KVIC, DICs and
State KVI Boards with KVIC as the Nodal Agency at the national level for setting up
new self-employment ventures/projects/micro enterprises to generate employment
opportunities in rural as well as urban areas of the country. The other objective is to
bring together widely dispersed traditional artisans/rural and urban unemployed youth
and give them self-employment opportunities to the extent possible, at their place so as
to help arrest migration of rural youth to urban areas. Any individual, above 18 years
of age can avail the benefit of this programme. However, assistance under the Scheme
is available only for new projects sanctioned specifically under the PMEGP. Under this
programme, financial assistance is provided for setting up of micro enterprises costing
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Upto Rs.25 lakhs in manufacturing sector and 10 lakhs in service sector. The assistance
is provided in the form of subsidy Upto 25 percent (35 percent for special category) of
the project cost in rural areas while it is 15 percent (25 percent for special category) for
urban areas.
 Scheme of fund for Regeneration of Traditional Industries (SFURTI)- With a view
to making the traditional industries more productive and competitive and facilitating
their sustainable development, the Govt. of India announced setting up of a fund for
regeneration of traditional industries. The objective is to organize the traditional
industries and artisans into clusters to make them competitive and provide support for
their long term sustainability and economy of scale, and provide sustained employment
for traditional industry artisans and rural entrepreneurs to enhance marketability of
products of such clusters by providing support for new products, design intervention
and improved packaging and also the improvement of marketing infrastructure. The
objective is also to equip traditional artisans of the associated clusters with the improved
skills and capabilities through training and exposure visits and to make provision for
common facilities and improved tools and equipment’s for artisans in order to
strengthen the cluster governance systems with the active participation of the
stakeholders, so that they are able to gauge the emerging challenges and opportunities
and respond to them in a coherent manner. Funding for the cluster varies from Rs.1.5
Crore to Rs.8 Crore in view of the size and scale of the project. Funding pattern under
the scheme has provision for soft interventions including skill training, capacity
building, design development, etc. hard interventions including Common Facility
Centres, Raw Material Banks(RMB), training centres, etc. and cross cutting thematic
interventions which include brand building & promotion, news media marketing, e-
commerce, innovation, R&D initiatives and developing linkages between clusters.
 Market Promotion and Development Assistance(MPDA)- The MDA scheme of
KVIC has been modified as Market Promotion Development Assistance scheme
(MPDA). MPDA scheme is formulated as a unified scheme by merging different
schemes /sub-schemes/components of different Heads implemented in the 11th Plan,
namely: Market Development Assistance, Publicity, Marketing and Market promotion
and adds a new component of Infrastructure (inclusive of new component of Marketing
Complexes/Khadi Plaza).
The components of the scheme are as follows:
22
A. Modified MDA- The existing MDA scheme, had subsidy @ 20% on production value
of Khadi to be distributed among producing institutions (30%), selling institutions
(45%) and artisans (25%). The Modified MDA shall be at 30% of the Prime Cost and
shall be distributed amongst producing institutions (20%), selling institutions (40%)
and artisans (40%). Under the Modified MDA, Pricing would be fully delinked from
the cost chart and products can be sold at market-linked prices at all stages of
production. Incentives would be extended to other Artisans and employees.
B. Publicity- Under the Publicity (currently under the Village Industry Grant), KVIC
undertakes publicity of schemes and products of the sector.
C. Market Promotion & Infrastructure- The new component of ‘Market Promotion &
Infrastructure’ would encompass establishment of Marketing Complexes/ Plazas
(EMCP) with an outlay of Rs. 60 crores. This is a new inclusion under Market
Promotion & infrastructure. The maximum assistance per project will be limited to
Rs.10 Crore.
D. Exhibitions (Foreign and Domestic)- Assistance would be provided under the
scheme to the eligible KVIs for participation in International Exhibitions/ Trade Fairs
held in foreign countries in order to showcase Khadi & Village Industry products to
foreign countries, access international buyers and sellers and forge business alliances
etc.
6. Schemes for Coir Sector: -
 Coir Vikas Yojana- Coir Board is implementing the Export Market Promotion Scheme
for adoption of strategic and aggressive product specific and market specific
promotional programmes for popularizing coir and coir products in markets abroad,
supporting the export oriented industry on modernization programme and to attain
overall and sustainable development of Indian Coir Industry by participating in
international fairs / product promotion programmes/ seminars etc. and to assist the
entrepreneurs to participate in such programmes through export market development
assistance scheme. TA financial assistance of Upto Rs.2.00 lakhs is provided to the
eligible coir exporters to participate in the international fairs/product promotion
programmes etc. Assistance for publicity material up to 25% of the production cost
with over all ceiling of Rs.15000/- is also admissible. All micro, small and medium
exporters, with FOB turnover of less than Rs.2.00 crore worth coir and coir products in
23
the previous year and micro, small & medium entrepreneurs of coir and coir products,
registered with the Coir Board, would be eligible for assistance under the scheme,
provided they have not availed the facility from any other source for the same purpose
or participated three times in the same exhibition to the same destination thrice with
government assistance.
 Coir Udyami Yojana- The objective of the scheme is to Renovate, Modernize and
Technologically Upgrade the most crucial link in the Coir production chain, namely
Spinners and Tiny Household sector. The scheme envisages replacement of outdated
ratts/looms and providing of work sheds to spinners and tiny household units resulting
in increase in production and earnings of workers. Any individual above 18 years of
age with Indian Citizenship can apply under the scheme. There will be no income
ceiling for assistance for setting up of project under CUY Scheme. Assistance under
the Scheme is only available for projects for the production of coir fibre/yarn/products
etc. coming under coir sector. Assistance will be made available to individuals,
Companies, Self Help Groups, NGO, Institutions registered under Societies
Registration Act 1860, Production Cooperative Societies, Joint Liability Groups and
Charitable Trust. The SC/ST, women, NER and Andaman and Nicobar Island and
Lakshadweep beneficiaries will be given priority.
 Coir S & T Yojana (PLAN S & T)- Coir Board is implementing the ‘Science
and Technology Scheme’ since 2000-01, for Research and Development activities of
the Board through the twin research institutes viz. Central Coir Research Institute,
Kalavoor and the Central Institute of Coir Technology, Bangalore. With the efforts of
these research institutions, the Board could develop many new eco-friendly
technologies, processes, diversified products, equipment’s and machinery for increased
productivity and efficiency and grades and quality of the coir products.
7. ASPIRE: A Scheme for Promoting Innovation and Rural Entrepreneurship: - A

Scheme for Promotion of Innovation, Rural Industry and Entrepreneurship was
launched by the Ministry on 18.3.2015. The scheme was formulated to set up a network
of technology centres and to set up incubation centres to accelerate entrepreneurship
and also to promote start-ups for innovation and entrepreneurship in agro-industry. The
scheme emanates from the Finance Minister’s budget speech for 2014-15, whereby, he
has suggested establishing Technology Centre Network to promote Innovation,
24
Entrepreneurship and Agro Industry with a fund of Rs.200 crores. ASPIRE is designed
to provide necessary skill set for setting up business enterprises and also to facilitate
the market linkages available to entrepreneurs and to provide hand holding for a critical
period to ensure self-sustainability. The most important component is to set up
Livelihood Business Incubators (LBI) under National Small Industries Corporation
(NSIC), KVIC or Coir Board or any other Institution/agency of GOI/State Govt. or
under PPP mode with these institutions. The next important component is to set up
Technology Business Incubators (TBI) at twin levels, i.e. supporting existing
incubation centres operated currently under different Ministries and Departments of the
Government of India or Institutions including National / Regional level institutions of
GOI / State Governments to set up such centre dedicated to incubation and enterprise
creation in the area of Agro based Industries and also new incubation centres to be set
up by eligible private institutions including Industry Associations, along with the
Academic Institutions, R&D laboratories, Universities, Government entities and
Technology Parks. The last important component is to create a framework for Start-up
Promotion through Small Industries Development Bank of India (SIDBI) by using
innovative means of finance like Equity, Quasi-Equity, Angel fund, venture capital
fund, Impact funds, Challenge funds etc. to enable ideas/innovation with creativity and
scalability to come to the fore and convert these into commercial enterprises with
specific outcomes and within a specific time period. The financial support under LBI
is Upto Rs.1 crore for NSIC & others and Rs.50 Lakh for PPP incubators. For setting
up of TBI, the assistance is for Rs.30 Lakh for existing and Rs.1 Crore for new
incubators. Other financial support includes funds for incubation of ideas @Rs.3 lakhs
per idea and a seed capital of Rs.1 Crore for setting up of start-ups by the incubators.
Under the scheme, 500 new incubation centres will be set up all over India by next year.
8. Credit Guarantee Scheme (CGTMSE): - CGTMSE has been set up to strengthen

credit delivery system and facilitate flow of credit to the MSE sector.
To make available credit to Micro and Small Enterprises for loans up to Rs. 100 lakh
without collateral/ third party guarantees.
The credit Guarantee under CGTMSE seeks to reassure the lender that, in the event of
a MSE unit, which availed collateral free credit facilities, fails to discharge its liabilities
to the lender; the CGTMSE would make good the loss incurred by the lender.
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9. Credit Linked Capital Subsidy Scheme (CLCSS): - It has been set up to facilitate
technological upgradation, the Government of India has been implementing the Credit
Linked Capital Subsidy Scheme (CLCSS).
The scheme is applicable to new and existing Micro & Small Enterprises(MSEs)
engaged in manufacturing. Facilitating 15% upfront capital subsidy to a maximum limit
of Rs.15.00 lakhs (investment in approved plant & machinery Upto Rs.1.00 crore) for
induction of well-established and improved technologies.
10. Digital Schemes: -

 e-Office in Ministry of MSME- e-Office initiative has been introduced to achieve
paperless office in the Ministry and is a role “model for various Ministries” in terms of
speed and scalability. Started in April 2014 by now over 1663 files and over 11,135
transaction initiated. Out of over 21000 files, a scientific weeding out processes
initiated and balance 7599 files are being scanned and uploaded. Over many sections
like Coir, SME, EDI, IC already digitized over 95 %. Our experience of streamlining
has been “appreciated” by DARPG and even circulated to all Ministries to follow- out
of lessons learnt.
 Aadhar Based Attendance- Aadhar-based Bio-metric Attendance System for all
employees of the Ministry was started on 20th August, 2014 resulting in punctuality of
attendance and the manual system has been dispensed with.
 Social Media- As advised by the Prime Minister, the Ministry has opened interactive
interfaces on Facebook and Twitter. We have been informing about all important
activities through these social media channels in addition to the websites of the Ministry
and its field offices. The response has been quite encouraging with the Facebook
(18859) and Twitter (25452) having attracted over 44000 followers. Ministry has also
set up a Udyami Helpline (Toll free number: 1-800-180-6763).
 Mobile Friendly Website-The website of the Ministry has been made mobile friendly.
With this, entrepreneur friendly content can be easily accessed through any mobile and
tablet. http://msme.gov.in/mob/home.aspx
 Web portal for MSME Naukri- An Employment Facilitation Portal
(www.msmenaukri.com) set up by NIESBUD was launched by the Minister (MSME)
on 11th July, 2014. This enables matching of job providers and job seekers. So far
21116 youth seeking jobs and 511 employers have been registered. This is being linked
26
to MSME Training Data-base in a searchable format to align with national Career
Centre initiative.
 Web portal for MSME Shopping- B2C web portal of NSIC
http://www.msmeshopping.com/was launched on 31st July, 2014. This portal will
market MSME products exclusively.1442 suppliers for 3986 products in 120 categories
have attracted over 185427 web-hits and sales of over Rs 261.18 Lakhs.
 Laghu Udyog Samachaar- To bring awareness about various development initiatives
of MSME a monthly newsletter “Laghu Udyog Samachar” is being re-published since
December 2015 after closure of publication for about 3 years.
11. Micro and Small Enterprises Cluster Development Programme (MSE-CDP): -

The Ministry of Micro, Small and Medium Enterprises (MSME), Government of India
(GOI) has adopted the cluster development approach as a key strategy for enhancing
the productivity and competitiveness as well as capacity building of Micro and Small
Enterprises (MSEs) and their collectives in the country. A cluster is a group of
enterprises located within an identifiable and as far as practicable, contiguous area and
producing same/similar products/services. The essential characteristics of enterprises
in a cluster are
(a) Similarity or complementarity in the methods of production, quality control and
testing, energy consumption, pollution control, etc.
(b) Similar level of technology and marketing strategies/practices
(c) Channels for communication among the members of the cluster
(d) Common challenges and opportunities.
To support the sustainability and growth of MSEs by addressing common issues
such as improvement of technology, skills and quality, market access, access to
capital, etc.
To build capacity of MSEs for common supportive action through formation of
self-help groups, consortia, upgradation of associations, etc.
To create/upgrade infrastructural facilities in the new/existing industrial areas/
clusters of MSEs.
To set up common facility centres (for testing, training centre, raw material
depot, effluent treatment, complementing production processes, etc.).
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12. Bar Code Scheme: - It is used for to enhance marketing competitiveness of Micro &
Small Enterprises (MSEs) by providing 75% of one –time registration fee and Annual
recurring fee (for first three years) paid by MSEs to GS1 India.
Popularizing the adoption of bar codes on large scale amongst MSEs. Motivating and
encouraging MSEs for use of bar codes through conducting seminars on Bar Code.
13. Marketing Development Assistance (MDA) Scheme: - To encourage small & micro
enterprises in their efforts of tapping and developing overseas markets.
To increase participation of representatives of small/micro manufacturing enterprises
under MSME India stall at international trade fairs/exhibitions.
To enhance exports from the small/micro manufacturing enterprises.
Office of Development Commissioner (MSME) is a nodal organisation for the
implementation of the Scheme through its various MSME-DIs / MSME-Dislocated
across the country. Every year, this office prepares an event calendar which comprises
of selected potential events of Indian Trade Bodies like ITPO, FIEO, EEPC India, etc.
under the Ministry of Commerce and Industry. Thereafter, a circular is prepared on the
basis of fact sheet as and when received from Indian Trade Bodies and uploaded the
same on official website and also circulated to attached/subordinate offices for the wide
publicity of events and call for the applications. The MSME – DIs receives the
applications along with requisite documents, select the MSEs as per display product
profile, theme of fair.
PROBLEMS OF MSME`S IN INDIA

Presently, the medical area of Jhansi MSME`S are facing different types of problems. Most of
the problems are controllable while rests are uncontrollable. Based on data analysis and study
of the related literature the MSME`S problems can explain as follows: -
1. Lack of credit from banks-The MSME`S are presently facing the problems of credit from
the banks. The banks are not providing the adequate amount of loan to the MSME`S. The loan
providing process of the banks is very long and formalistic. The owners of the MSME`S has to
produce different types of documents to prove their worthiness.
2. Competition from multinational companies- In present era of globalization, the MSME`S
are facing the great from the international manufacturing companies who are proving quality
goods at cheapest price. Therefore, it is very difficult to compete with the multinational
companies.
28
3. Poor Infrastructure-Though, MSME`S are developing so rapidly but their infrastructure is
very poor. With poor infrastructure, their production capacity is very low while production cost
is very high.
4. Unavailability of raw material and other inputs- For MSME’s required raw material
skilled work force and other inputs, which are not available in the market. Due to unavailability
of these essentials, it is very difficult to produce the products at affordable prices.
5. Lack of advanced technology-The owners of MSME`S are not aware of advanced
technologies of production. Their methodology of production is outdated. The owners are using
older method in the field of fabricated metal and textile.
6. Lack of distribution of marketing channels-The MSME`S are not adopting the innovative
channels of marketing. Their advertisement and sales promotion are comparatively weaker than
the multinational companies are. The ineffective advertisement and poor marketing channels
leads to a very poor selling.
7. Lack of training and skill development program- The training and development programs
in respect of uniform labour laws to each MSME. The must be sooth running of the concern
not to create a problem for them. Every effort must do to avoid the unnecessary red tape.
8. Proper research and development: There should proper research and development in
respect of innovative method of production and service rendering. The innovative products will
provide the cheaper products and the MSME’S will be able to cope up with the situation.
29
Chapter: -2
Review of Literature
(Ms. K.Sumathi And G.Kavitha, 2017) MSME (Micro, Small, Medium Enterprises) is the
backbone of our Indian economy and it is facilitating a growth over the years both in terms of
employment and economic growth. There have been many difficulties listed as financial
constraints, lack of strategies in marketing, lack of quality, lack of newness etc. MSME will
continue to play an important role in our economy where the twin problem of employment and
poverty constitute a major development challenges.
(Saud Ilahi, 2015) MSME has come up as a strong sector of an Indian economy and the labour
intensity of this sector is higher than the large enterprises. It supports the rural and backward
areas by reducing regional imbalances, assuring more equitable distribution of national income
and wealth. It faces insufficient credit information, inadequate credit appraisal, risk
management skills, poor repayment records, outdated technology, tough competition, delayed
payments, inefficient labour, faulty planning etc.
(N. Aruna, 2015) This study analyse the problems of MSME in the period of global economy
and also known about the factor affecting MSME. The study was also made the socio-economic
conditions of MSME. It can find out to adopt the latest technology to improve the productivity
to earn high income for the benefit to the small scale industries and the employees who involve
in this industries.
(N. Aruna, 2015) Government institutions takes the initiative measures to improve the export
performance of MSME to develop the economy. There is a problem related to the finance from
the banks and financial institutions and also viewed this problem may differ from region to
region between sectors or between industrial enterprises within a sectors.
(Prof. Mishu Tripathi, Mr. Saurabh Tripathi, Mr. Rikin Dedhia, 2016) At the time of
modernisation manufacturing sectors output has been increasing and the contribution of service
sector in total GDP is rapidly increasing as there is high demand from the foreign consumers
leading to increase in exports of the country. The latest reports by the ministry shows the
development and increment of MSMEs over the 48 million in India.
(Prof. Mishu Tripathi, Mr. Saurabh Tripathi, Mr. Rikin Dedhia, 2016) Small scale industries
considered as a multidimensional one, it is revolving around the availability of adequate
finance, more so with working capital. SSI (Small Scale Industries) considered as a priority
30
sector in our country and they continue to show problem related to credit flow. The institutional
assistance to small business would be to set up the right type institutions and private
infrastructural facilities to small enterprises and facilities related to the credit facilities.
(Jishnu Cheeroli, 2018) SSI generally catering to the local or regional demand and it is fairly
labour intensive with comparatively smaller capital investment than the larger unit. MSME
contribute nearly 22% of the GDP of countries GDP, 45% of manufacturing output and 40%
of exports. In MSMEs the subsidies act as a motivational force and push the prospective
entrepreneurs to an entrepreneurial line, it results in increase of SSI in rural and backward
areas.
(Jishnu Cheeroli, 2018) MUDRA (Micro Units Development and Refinance Agency) yojana
is a type of bank which is set up by the government of India for the development and
refinancing of micro units. In this yojana the loan has been sanctioned rs.1crore to SSI.
(Ms. Syamala Devi Bhoganadam, 2017) “A study on the barriers affecting the growth of SSI
in India”, Identified that the firms which are not interested in doing the business for long term
have not registered their firms which are not interested in doing the business for long time.
Consequently, firms need to know the advantages of registering their firms to avail facilities
such as external credit, government order and other services offered by MSMEs supporting
institutions.
(Ms. Syamala Devi Bhoganadam, 2017) In MSME, by improving the sales activities,
effectively limiting the credit period and utilising the production capacity to maximum level,
the financial positions improves substantially.
(Anuradha, 2014) Globalisation periods of Indian economy states that a positive effect on
growth of SSI in terms of number of units, production, employment and exports. The study
gives the clear indication that globalisation is putting major importance and big opportunities
for MSMEs. An increase in the growth rate of number of units and in the globalisation period.
The government pays a proper attention towards the threats of globalisation into management
and development activities.
(Seemant yadav 2018) (Tripathi, 2018) MSME faced challenges at the international level like
lack of entrepreneurial, managerial and marketing skill; bureaucracy and red tape, lack of
accessibility to information and knowledge, difficulties assessing financial resources or lack of
capital, lack of quality awareness etc.
31
(Tripathi, 2018) The MSMEs highlighted that the research and development in front of MSMEs
as strongest weakness by adding that SMEs in developed countries give the maximum focus
for product and process innovation, IT tools and research and development.
(Hussain, 2014) In this whole study mostly highlighted the challenges in MSMEs development
and policy issues by giving the appropriate financing mechanism. The study reveals that the
government announce some policy package aimed at enhancing competitiveness of SSIs both
globally and domestically by providing easier access to credit by public sector banks, private
sector banks and foreign banks. And it should also emphasises that active involvement of banks
in social lending which requires changes in the attitude of banking personnel, efficient
management of resources, improvement in work technology and ethics and proper arrangement
of manpower.
32
Chapter: -3
Research Methodology
The objective of this study is to conduct secondary research on the MSME industry in order to
identify the major challenges faced by the enterprises and focusing mainly on the Precision
tool t to identify the hindrances that these enterprises currently face and to suggest policy
measures that will improve the condition of these enterprises and will empower them.

 Population
MSME enterprises at medical area of Jhansi will be the population.
 Sample design
Sample size is 30.
 Sampling method
Convenient sampling method is used for data collection.
 Source of Data
Primary source: Structured questionnaire schedule
Secondary source: printed material available in various magazine, newspaper and
authorised website related to MSMEs.
 Tools of Analysis
Simple analysis applied with the help of graphs and tables, result is observed by the
graphs and tabular form of data.
Limitations of The Study

1. Considering the constraint of time the sample had to be retrieved to 30.
2. This study may be subject to personal bias of the respondents while answering the
questionnaires.
3. The area of study is limited to medical area of Jhansi and also very small sample of
respondents. Thus the findings of the study cannot be a true representative and cannot be
33
generalized. In spite of the above limitations best efforts has been made to carry out the work
in an authentic way.
Objectives of Study of MSME

1) To know the geographical area of selling of a product by enterprises and also known the
involvement of male and female owner in MSMEs.
2) To know the time duration of the business and the number of worker who works in the
enterprises for day to day operations in the enterprises.
3) To know the planning of the firm or enterprises for the future growth of their business in the
market with help of previous manual or electronic data records.
4) To know the awareness about financial institution who granted the source of finance in terms
of loans, collection of cheques, letter of credit etc.
5) To know the use of resources, business support, investment of finance, arrangement of
finance and identify the financial institution(banks) for daily business operations.
34
Chapter: -4
DATA ANALYSIS AND INTERPRETATION
Q.1 What is your role in relation to main business?
RELATION TO BUISNESS NO. OF PEOPLE PERCENTAGE OF PEOPLE

Owner 18 60%
One of the owner 10 33.33%
Other 2 6.67%
Total 30 100%
Relation to buisness
20 70%
18
60%
16
14 50%
12 40%
10
8 30%
6 20%
4
10%
2
0 0%
Owner One of the owner Other
NO. OF PEOPLE PERCENTAGE OF PEOPLE
Interpretation: The above table and graph shows that the no. of owner is 60%, one of the
owner is 33.33% and other people is only 6.67% in the graph.
Q.2 What is the area of your selling range?
SELLING RANGE NO. OF SELLING RANGE PERCENTAGE OF SELLING RANGE

Within state 24 80%
Outside state 5 16.67%
Both 1 3.33%
Total 30 100%
35
NO. OF SELLING RANGE
3%
17%
Within state
Outside state
80% Both
Interpretation: According to survey 30 people are selected by me in which the people of

enterprises whose area of selling within the state is 80% and outside the state is 17% and people
who have in the both category is 3%.
Q.3 Firm owned by?

FIRM OWNED NO. OF OWNER PERCENTAGE OF OWNER
Male 22 73.33%
Female 8 26.67%
Total 30 100%
Firm owned by
100% 8 26.67%
80%
60%
22 73.33%
40%
20%
0%
NO. OF OWNER PERCENTAGE OF OWNER
Male Female
Interpretation: The above bar graph shows that the no. of male owner in firm is 22 which is
equals to 73.33% and the female owner in firm is 8 which is equals to 26.67%.
36
Q.4 How long you have been in this business?
DURATION OF BUSINESS NO. OF ENTERPRISES PERCENTAGE OF ENTERPRISES

2 years or less 14 46.66%
3 to 5 years 12 40%
6 to 10 years 2 6.67%
10 years and above 2 6.67%
Total 30 100%
Duration of buisness
16 50.00%
14 45.00%
40.00%
12
35.00%
10 30.00%
8 25.00%
6 20.00%
15.00%
4
10.00%
2 5.00%
0 0.00%
2 years or less 3 to 5 years 6 to 10 years 10 years and above
NO. OF ENTERPRISES PERCENTAGE OF ENTERPRISES
Interpretation: From the above it is clear that about 46.66% are belongs to 2 years or less,
then it falls lightly to 40% in 3 to 5 years and goes down to 6 to 10 years or 10 years and above
to 6.67%.
Q.5 Number of full time workers in your enterprise?

WORKERS OF ENTERPRISES NO. OF WORKERS PERCENTAGE OF WORKERS
Less than 10 15 50%
10-30 10 33.33%
30-50 2 6.67%
50-100 1 3.33%
More than 100 2 6.67%
Total 30 100%
37
NO. OF WORKERS
3%7%
7% Less than 10
30-50
50%
50-100
33% More than 100
Interpretation: The study reveals that the less than 10 workers are in the 50%, 10 to 30
workers are in the range of 33% and it shows when the more workers are work in any
enterprises then the average is going down as we shown in graph 30 to 50 workers or more
than 100 workers are in 7% and 50 to 100 workers are in the average of 3%.
Q.6 Do you keep record records?
RECORD KEEPING NO. OF RECORDS PERCENTAGE OF RECORDS

Manually 19 63.33%
Electronically(computerised) 11 36.67%
Total 30 100%
Record keeping
PERCENTAGE OF RECORDS 36.67%

63.33%
NO. OF RECORDS 11
19
0 2 4 6 8 10 12 14 16 18 20
Electronically(computerised) Manually
Interpretation: the above fig. shows that the 63.33% people can record manually and the rest
of people who has the average of 36.67% can keep record electronically or computerised.
38
Q.7 Are you aware of the availability of the following source of finance for SMEs?
SOURCE OF FINANCE NO. OF AWARENESS PERCENTAGE OF AWARENESS

Commercial banks 28 93.33%
SIDBI 22 73.33%
State financial corporation 10 33.33%
Government sponsored 8 26.67%
programmes
Non-banking financial 12 40%
institution
Micro financial institution 6 20%
Source of finance in SMEs

Micro financial institution 20%
6
Non-banking financial institution 40%
12
Government sponsored programmes 26.67%
8
State financial corporation 33.33%
10
SIDBI 73.33%
22
Commercial banks 93.33%
28
0 5 10 15 20 25 30
PERCENTAGE OF AWARENESS NO. OF AWARENESS
Interpretation: The study reveals that the awareness of source of finance for SMEs in which
93.33% are known about commercial banks,73.33% known about SIDBI, 33.33% are known
about state financial corporation, few people known about government sponsored programmes,
40% are known only non- banking financial institution and least people are known about the
micro financial institution which is 20% in data.
39
Q.8 Are you aware of the product and services offered by commercial bank to SMEs?
PRODUCT AND SERVICES NO. OF AWARENESS OF AVERAGE OF

OF COMMERCIAL BANKS PRODUCT AND SEVICES AWARENESS
Loan and other credit 30 100%
Term deposits 26 86.67%
Current account 28 93.33%
Collection of cheques 24 80%
Letter of credit 10 33.33%
Factoring services 6 20%
Merchant services 4 13.33%
Aware of product and services by

commercial bank to SMEs
35 120%
30 100%
25 80%
20
60%
15
10 40%
5 20%
0 0%
Loan and Term Current Collection Letter of Factoring Merchant
other deposits account of cheques credit services services
credit
NO. OF AWARENESS OF PRODUCT AND SEVICES AVERAGE OF AWARENESS
Interpretation: The above fig. shows that the awareness of the product and services offered
by commercial bank to SMEs in which 100% of enterprises known about the loans and other
credit facilities, 86.67% are known about the term deposits, 93.33% are known about the
current account, 80% are known about collection of cheques, 33.33% are known about letter
of credit, 20% are only known about factoring services and only few enterprises are known
about the merchant services which is only 13.33%.
40
Q.9 Identify your preferred financial institution for your daily business operations?
FINANCIAL INSTITUTION NO. OF AVERAGE OF

FOR DAILY OPERATIONS ENTERPRISES ENTERPRISES
Public sector bank 24 80%
Private sector bank 22 73.33%
Foreign bank 2 6.67%
Cooperative society 12 40%
Others 4 13.33%
FINANCIAL INSTITUTONS FOR DAILY

OPERATIONS
30
25
20 24
22
15
10 12
5
80% 73.33% 2 6.67% 40% 4 13.33%
0
Public sector bank Private sector bank Foreign bank Cooperative society Others
NO. OF ENTERPRISES AVERAGE OF ENTERPRISES
Interpretation: With the help of above table and graph I try to show that 80% of enterprises
can use the public sector bank, 73.33% enterprises use private sector banks, only 6.67% of
enterprises can use the foreign bank, 40% enterprises can use the cooperative society and
13.33% can use other services for their daily operations.
Q.10 How would you keep informed about the business support available?
BUSINESS INFORMATION NO. OF ENTERPRISES AVERAGE OF ENTERPRISES

Personal business contacts 28 93.33%
Government source 20 66.67%
Media mass communication 26 86.67%
Other 10 33.33%
41
Buisness support information
30 100.00%
90.00%
25 80.00%
20 70.00%
60.00%
15 50.00%
40.00%
10 30.00%
5 20.00%
10.00%
0 0.00%
Personal business Government Media mass Other
contacts source communication
NO. OF ENTERPRISES AVERAGE OF ENTERPRISES
Interpretation: The above graph shows that information about the business support level in
which 93.33% enterprises will collects the information through personal business contacts,
66.67% enterprises will collect information through government source, 86.67% enterprises
will collect information through the media mass communication, 33.33% enterprises will
collect information through other sources.
Q.11 For what do you prefer business finance for?
USE OF BUISNESS NUMBER OF AVERAGE OF

FINANCE ENTERPRISES ENTERPRISES
Establishment 27 90%
Growth 29 96.67%
New product development 24 80%
Reaching new market 16 53.33%
Working capital 19 63.33%
Existing commitment 10 33.33%
Research and development 8 26.67%
42
USES BUISNESS FINANCE
Research and development 26.67%
8
Existing commitment 33.33%
10
Working capital 63.33%
19
Reaching new market 53.33%
16
New product development 80%
24
Growth 96.67%
29
Establishment 90%
27
0 5 10 15 20 25 30 35
AVERAGE OF ENTERPRISES NUMBER OF ENTERPRISES
Interpretation: The above table shows that their uses of business finance i.e., 90% of
enterprises will prefer for establishment, 96.67% of enterprises will prefer for growth, 80% of
enterprises will prefer for new product development, 53.33% of enterprises will prefer for
reaching new market, 63.33% of enterprises will prefer for working capital, 33.33% enterprises
will prefer for existing commitment, 26.67% enterprises will prefer for research and
development.
Q.12 Which is your preferred source of business finance?
SOURCE OF BUISNESS NUMBER OF AVERAGE OF

FINANCE ENTERPRISES ENTERPRISES
Savings 30 100%
Family/Friends 24 80%
Bank loan 18 60%
Indigenous lender 2 6.67%
Leasing 6 20%
Financial institution 9 30%
Business angels 1 3.33%
Government programmes 13 43.33%
43
Preferred source of buisness finance
35 120%
30 100%
25 80%
20
60%
15
10 40%
5 20%
0 0%
NUMBER OF ENTERPRISES AVERAGE OF ENTERPRISES
Interpretation: In the above table 100% of enterprises arrange their finance for business from
savings, 80% arranged from family and friends, 60% will arranged from bank loan, 6.67 from
indigenous lender, 20% of enterprises arranged finance from leasing, 30% of enterprises
arranged finance for business from financial institution, 3.33% arranged it from business angels
and at last 43.33% of enterprises will arrange their finance for business from government
programmes.
44
Chapter: -5
Findings
1. Most of the respondents are owner of an enterprises and maximum are male.
2. Most of the respondents are selling their products and services within the state.
3. Most of the respondents are 2 years or less than 2 years in the business.
4. Most of the respondents or owner have 10 or less than 10 workers in an enterprise.
5. Most of the respondents and enterprises are keep their record manually.
6. Most of the respondents are known about commercial banks for their source of finance
for SMEs.
7. Most of the respondents are known about the loans and other credit facilities services
offered by commercial banks to SMEs.
8. Most of the respondents are preferred the public sector bank for our daily business
operations.
9. Most of the respondents are using their personal business contacts to keep informed
about the business support available.
10. Most of the respondents are use their business finance for establishment and growth of
our enterprises.
11. Most of the respondents are arrange their source of finance for their business from her
own savings, family/friends and bank loan.
45
CONCLUSIONS & SUGGESTIONS
The main purpose of data collection was to study how the entrepreneurs managed the micro,
small and medium enterprises. It also shows the role of MSMEs helped in economic
restructuring and development of Jhansi. This data revealed that hurdle like financial constrain
and issues relating to relation of business, geographical area of selling range be more
effectively dealt by the enterprises. Further, the data collected revealed that overall globalised
business environment of Jhansi has been average favourable for the growth of micro and small
scale industries. The number of the data is that the MSMEs have played role in employment
generation in Jhansi. Due to the acute power shortage, industrial units are managing only 50
per cent of capacity and they situation has turned from bad to worse without inability to pay
even workers‟ salary. Since most of the enterprises complained about non availability of labour
(though this problem is not covered) Government need to look into this matter. It has to amend
the labour laws which are contemporary and relevant to the present globalized scenario. Simple
and clear policies and acts are to be made so that these enterprises can understand them and
utilize as well as implement them in the business for compliance and secure benefits. There are
many government schemes but from the study it was observed that most of these enterprises
are not aware and do not understand how they can benefit out of them.
Entrepreneurs operate in a micro and small business that is affected by numerous internal and
external influences that continuously changes. If the government banks and financial
institutions will take proper initiatives in the sector of MSMEs and they will take pride while
servicing the MSMEs, these challenges can be solved and the economic growth rate of Jhansi.
Now-a-days organizations are knowledge based and their success and survival depend on
access finance, creativity and innovation. The rate of changes is fast-tracking rapidly, as new
knowledge idea generation and global distribution are increasing.
Suggestions:
1. MSMEs should engage government to formulate policies that enhance their business
operation.
2. The support given by the national and state government to the MSEs is not adequate enough
to solve their problems.
3. The Lack of awareness about finance schemes shows that enterprise does not understand
how they can benefit out of them.
46
QUESTIONNAIRE
1. Name of your enterprise ____________________________Your Bank…………………….

2. Which industry most closely describes your business?
Manufacturing Service
3. Name of the product/service of your enterprise_______________________
4. Have you registered your enterprise under GST? Yes, or No………………...
Composition Regular
5. How much original investment your company has in plant & machinery/equipment
&instruments at present?
Plant and Machinery Equipment and Instruments
Up to 25 lakh Up to 10 lakh
25lakh to 5 crores 10lakh to 2 crores
5crores to 10 crores 2crores to 5 crores
6. What is your role in relation to main business?
Owner one of the owner Other
7. What is the area of year selling range?
Within state Outside state Both
8. Firm owned by
Male owner/CEO Female owner/CEO
9. How long have you been in this business?
2yrs or less 3yrs to 5yrs 6yrs to 10yrs 10yrs & above
10. Number of full time workers in your enterprise.
Less than 10 10-30 30-50 50-100 More than 100
11. Do you keep records?
Manually Electronically(Computerized)
12. Do you have business plan for your enterprise?
Yes No
13. Considering the turnover of previous years, how much does your firm expected to grow?
Over 25% 10-25% Less than 10 No Growth Become
% Smaller
Sales/Turnover
Profit Before Tax
Profit After Tax
Capital
Employment(no)
47
14. Over the next two years, do you plan to … (Tick that Apply)
Grow the business modestly Grow the business substantially
Sell/Transfer/windup the business Maintain the business at current level
Reduce the business from current levels
15. What are the most critical problems your firm is facing in doing business? (rank it)
1) Cost of production/cost of labour is high
2) Skilled/experienced managers are not available
3) Stiff competition from domestic firms
4) Access to bank finance
5) Lack of technology in production
6) Proper book keeping and accounting is not available
7) Marketing
8) Firm does work at very low margin
9) Others
16. Are you aware of the availability of the following source of finance for SME’s? YES NO
1) Commercial banks Y
2) SIDBI e
s
3) State Financial Corporations
4) Government sponsored programmes
5) Non-Banking Financial Institutions
6) Micro Finance Institutions
17. Are you aware of the products and services offered by commercial banks to SME’s? Yes No
1) Loans, o/d and other credit facilities
2) Term deposits
3) Current Account
4) Collection of Cheques
5) Letter of credit
6) Factoring Services
7) Merchant Services
18. Which is your preferred source of business finance? (Tick all that apply)
Savings Family/Friends Bank loan Indigenous lender Leasing
Financial Institutions Business Angels Govt. programs
19. How would you keep informed about the business support available? (Tick all that apply)
Personal business contacts Government source Media mass communication
Others
48
20. For what do you prefer business finance for? (Tick all that apply)
Establishment Growth New product development Reaching new market
Working capital Existing commitments Research and Development
21. Identify your preferred financial institution for your business daily operations? (Tick that
apply)
Public Sector Bank Private Sector Bank Foreign Bank Co-operative society
Others
22. Could you please inform how much your firm has grown on an average per year during last three
years? (Tick that Apply)
Over 25% 10-25% Less than No Growth Become
10% Smaller
Sales Turnover
Profit before
tax
Profit after tax
Capital
Employment
49
BIBLIOGRAPHY
Anuradha, D. J. (2014, July 31). Problems And Prospects Of MSME In India In The Era Of
Globalisation. Journal Of Research In Buisness And Management, Vol. 2, 20-28.
Bhatia, K. (2013). Legal method, reasoning and research methodology. Regal publications.
BL Mathur. (2008). Rural management. Jaipur: RBSA .
Finance, I. I. (2017).
Hussain, A. A. (2014). Problems, Solutions And Prospectus In Present Scenario. International Journal
Of Engineering And Management Sciences, Vol. 5 (2), 109-115.
Jishnu Cheeroli, M. V. (2018, February). A Study On The Problems And Prospectus Of Micro
Enterprise With Special Reference To Kondotty Taluk. IOSR Journal Of Buisness And
Management, Vol. 20, 15-40.
Khothari, C. R. (2016). Research Methodology. Delhi: NewAdge Publication.
MK thithe and Dr. Jitendra ahirro. (n.d.). Agricultural cooperative and rural development. Lulu.com.
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Journal Of Commerce, Buisness And Management(IJCBM), Vol. 6, 6.
Ms. Syamala Devi Bhoganadam, D. N. (2017, March). A Study On Issues And Challenges Faced By
SME's . Research Journal Of SRNMC, 48-57.
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JBM), Vol. 17, 43-49.
Prof. Mishu Tripathi, Mr. Saurabh Tripathi, Mr. Rikin Dedhia. (2016, March 03). Challenges Faced By
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Saud Ilahi. (2015). MSME In Delhi:Problems And Propectus. International Journal Of Research And
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50

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A Dissertation Report on

A STUDY ON THE MAJOR CONSTRAINTS OF

A dissertation Report Submitted in Partial Fulfillment of the Requirements

MASTER OF BUSINESS ADMINISTRATION

VIJAY KUMAR SINGH

MR. VIJENDRA SINGH

INSTITUTE OF ECONOMICS AND FINANCE,

Place: Jhansi Signature of Guide

Date: 07/04/2019 Mr. Vijendra Singh

VIJAY KUMAR SINGH

Chapter No. Chapter Name Page No.

Chapter 2 Review of Literature 30

Chapter 4 Data analysis & Interpretation 35

1. History of MSME (Micro, Small, Medium Enterprises): -

Serial No. Year Investment Limits in Plant and Additional Conditions

1 1955 Upto Rs. 5 Lakh Less than 50/100

2 1960 Upto to Rs. 5 Lakh No conditions

Enterprises Investment in plant & machinery

Enterprises Investment in equipment’s

Enterprises Investment in plant & machinery

Enterprises Investment in equipment’s

2. Mandate of the ministry of MSME: -The mandate of MSME as contained in

3. Organisational Structure of MSME: -

Small Scale Cottage

Rural Small Urban Small

Short Duration Long Duration Short Long

Rural Small Urban Small

Short Long Short Long

4. Recent policy initiatives of MSME: -

 Udyog Aadhaar Memorandum (UAM): - The Ministry in September-2015 under the

 Prime Minister’s Employment Generation Programme (PMEGP): - PMEGP is the

 A Scheme for Promotion of Innovation, Rural Industry and Entrepreneurship

 Scheme of Fund for Regeneration of Traditional Industries (SFURTI): - The

 Lean Manufacturing Competitiveness Scheme (LMCS): - LMCS is being

 Credit Linked Capital Subsidy Scheme (CLCSS) for Technology Upgradation: -

ROLE OF MSMEs IN INDIAN ECONOMY

Performance of manufacturing output of MSME in GDP

2 2011-12 1322777 7.81 27.60 35.41 41.98

3 2012-13 1375589 7.52 28.60 36.12 40.79

4 2013-14 1488352 7.45 28.60 36.05 39.63

5 2014-15 1653622 7.39 29.30 36.69 38.50

7 2016-17 1809976 7.04 30.50 37.54 37.33

Source: - Annual report 2017-18, GOI, Ministry of MSME

OTP will send to your mobile registered with UIDAI.

 Option for registration without Aadhaar: - An applicant or the authorised signatory

Statutory bodies and other bodies under the MSME Ministry

5. Schemes for Khadi & Village Industries Sector: -

 Prime Minister’s Employment Generation Programme (PMEGP)- PMEGP is a

6. Schemes for Coir Sector: -

7. ASPIRE: A Scheme for Promoting Innovation and Rural Entrepreneurship: - A

8. Credit Guarantee Scheme (CGTMSE): - CGTMSE has been set up to strengthen

10. Digital Schemes: -

11. Micro and Small Enterprises Cluster Development Programme (MSE-CDP): -

PROBLEMS OF MSME`S IN INDIA

Limitations of The Study

Objectives of Study of MSME

DATA ANALYSIS AND INTERPRETATION

Q.1 What is your role in relation to main business?

RELATION TO BUISNESS NO. OF PEOPLE PERCENTAGE OF PEOPLE

NO. OF PEOPLE PERCENTAGE OF PEOPLE

Q.2 What is the area of your selling range?

SELLING RANGE NO. OF SELLING RANGE PERCENTAGE OF SELLING RANGE

Interpretation: According to survey 30 people are selected by me in which the people of