Socio-Economic Status of Micro, Small And Medium Laborers

Enterprises: A Critical Appraisal

Abstract
The sector of micro, small and medium enterprises (MSME) has been recognised worldwide
as a driver of growth. A MSME Development Agency has been set up as a nodal agency by
many countries around the world to coordinate and oversee all government interventions in
the development of this field. In the case of India, the Medium Establishment was also
established for the first time as a separate law regulating the promotion and growth of micro,
small and medium enterprises (MSMEs). The Micro Small and Medium Enterprises (MSME)
Development Act 2006 (which came into force on 02 Oct 2006) serves as the Nodal
Development Agency under the Ministry of Micro, Small and Medium Enterprises (MSME) of
the Office of the Commissioner for Development (Micro, Small and Medium Enterprises).
Keywords: Micro, Small and Medium Enterprise (MSMEs), MSME Development Agency,
Worldwide, Established.

Introduction:
In all stages of its existence, India, as a country, has been famous for embracing and
nurturing diversity. The consequence has been the life of entrepreneurs since the civilization
of the Indus Valley. This has contributed to the creation of numerous micro, small and
medium-sized enterprises (SMEs). Even today, small and medium-sized enterprises are the
key contributors to jobs for the masses, to the development of the national economy and to
creating a sense of competitiveness at grassroots level. MSMEs have always represented the
Government of India's model of socio-economic policies that emphasised the judicious use of
foreign exchange for the importation of capital goods and inputs; the labour-intensive mode
of production; the discouragement of monopoly production and marketing practises; and the
overall successful contribution of the low-importation-intensive nation to foreign exchange
earnings.
MSMEs in India:
Micro, small and medium-sized enterprises (MSMEs) have been identified as the driving
force of economic growth and equitable development. The sector's key benefit is its
employment capability at low capital levels. In most economies, MSMEs make up more than
90 percent of total enterprises and are credited with generating the highest job growth rates
and accounting for a large share of industrial production and exports. In India, too, MSMEs
play a central role in the country's overall industrial economy. Approximately 8 percent of the
country's GDP, about 45 percent of manufactured production and about 40 percent of exports
were contributed by the MSME industry. This makes them critical for achieving the target of
inclusive growth, coupled with a high labor-to-capital ratio, high growth , and high
dispersion. The MSME sector has consistently reported a higher rate of growth relative to the
overall industrial sector in recent years. The sector has shown exemplary innovativeness and
adaptability with its resilience and dynamism to withstand the recent economic downturn and
recession. According to the available statistics (4th MSME Sector Census) 2006-07, 26
million MSMEs in the country were employed by approximately 60 million people. Of the
total, 28 percent were in the manufacturing sector and 72 percent in the service sector.
MSME Development Act, 2006

The new MSME Act 2006 was adopted by the Govt. Some major problems related to
MSMEs have been resolved, such as complex bureaucratic registration processes, lack of
funding, lack of management skills, etc. Increasing the relevance of the sector and providing
a specific description of MSMEs is the most important thing the Act has done. In addition,
the Act mandated the composition of the MSME8 National Board with a specific long-term
objective of overseeing and controlling the growth in India of micro, small and medium-sized
enterprises. The MSME Act 2006 has introduced a stringent law concerning the payment of
dues by dramatically raising fines for delay in payment.
Under the Act, enterprises have been categorized broadly into those engaged in
(i) manufacturing and
(ii) providing/ rendering of services. Both categories have been further classified into micro,
small and medium enterprises, based on their investment in plant and machinery (of
manufacturing enterprises) or in equipment (in case of enterprises providing or rendering
services) as under: 
 Manufacturing enterprises: Micro Enterprises- investment upto Rs 25 lakh. Small
enterprises- investment above Rs 25 lakh and upto Rs 5 crore. Medium enterprises
investment above Rs 5 crore and upto Rs 10 crore.
 Service Enterprises: Micro enterprises- investment upto Rs 10 lakh. Small enterprises-
investment above Rs 10 lakh and upto Rs 2 crore. Medium enterprises investment
above Rs 2 crore and upto Rs 5 crore.

Role of Labourers in Micro, Small and Medium Enterprises

Although the growth of the industrial proletariat as a consequence of organised industries is
of relatively recent origin in India, it is not possible to underestimate the important role of
workers in the field of production. In providing a perfect replacement for labour, scientific
and technical advancement alongside the sophistication of modern automation has not yet
been implemented. In any domain of the production unit, whether it is highly computerised
public or private organisations or bigger or smaller business issues, it is the centre of
production. In addition to fulfilling its tasks, labour also holds obligations of different
natures, increases collaboration in various capacities, and helps management achieve its
goals. Therefore the workers deserve respect and an entirely different treatment as they are
the important factor in any development. Therefore if treated rationally, it can be confidently
claimed that they contribute to industrial success and economic growth. In addition, it should
be noted that the workforce of these days is not in any way, an unorganised, ignorant and
unconscious mass of employees that can be forced to bow its head before any arbitrary and
discretionary decisions and dictates of employers or management. In every field of our
economic life, labour, being an end and a means of development, occupies a prominent
position. Industry and labour are complementary to one another. The success and
advancement of one depends, therefore, on the progress and prosperity of the other. It is
important to eradicate the class tensions that mar the equilibrium of the industrial atmosphere.
Indeed, it is not merely the preservation of industrial peace that is required, but the
establishment of industrial harmony. It is known that the advent of a disciplined labour force
is an essential determinant of industrial growth. The labour sector addresses multi-
dimensional socio-economic dimensions that affect labour welfare, efficiency, labor-force
living standards and social security. Ability development by adequate preparation is of vital
importance in order to increase the living standards of the workforce and achieve higher
productivity. For rapid socio-economic growth, the development of manpower to provide
sufficient labour forces with adequate skills and quality for different sectors is necessary. One
of the basic goals is to create jobs in all productive sectors. In this context, both in urban and
rural areas, attempts are being made to provide an atmosphere for self-employment. During
the Ninth Plan phase, priority attention was provided to the elimination of undesirable
practises such as child labour, bonded labour and aspects such as safeguarding the protection
and social security of employees, taking care of labour welfare and providing the required
support measures to address problems relating to the jobs of both male and female workers in
various sectors. One of the prime objectives of the government's social and economic policy
is to boost labour welfare and increase productivity with a fair level of social security. The
resources were focused through the Skills Training and Growth Programmes, Monitoring of
Working Conditions, Building Industrial Peace through Health Infrastructures, Industrial
Relations and Disease Insurance, Injury and Unemployment for Workers, and then Families.
Unhealthy social practises such as bonded labour, child labour and adverse working
conditions are created by the situation of surplus labour and employees in the organised
segment of the economy.

REVIEW OF LITERATURE
The researcher has surveyed the related literature before planning the present research
proposal. The present study has been characterized in the following two heads:

STUDIES RELATED TO MSMEs

 Shameel Akhtar (2011) - The study reveals that there is a positive relation between
location, firm and managerial/owner specific factors and foreign market performance.
This shows that the firms, which take into account market infrastructure, perceived
risk linked with host market, firm’s ability to initiate and to produce differentiated
products, firm size and technology leadership are good in their performance.
 Jolanda Hessels (2011) - His paper focuses on the relationship between environmental
sustainability and the financial performance of Small and medium enterprises in terms
of profit development and revenue development. The results suggest a significant
positive association between environmental sustainability and firm performance.
 Arti Singh (2010) - This paper attempts to provide a glimpse of the Small Scale
Industries (SSIs) and the institutional setup for the development and diversification of
SSIs. In addition, a brief account of the SSIs in UP in general and SSIs in Varanasi in
particular.

STUDIES RELATED TO SOCIO- ECONOMIC STATUS OF LABOURERS

 S.K. Chauhan (2011) – The study concluded that most of the female bidi workers are
illiterate, the owners make discrimination in the given work load to them and since
due to the absence of trade union the employers are not careful about the various
service conditions provided to them.
 R.C. Upadhyaya (2011) – The study emphasized that floriculture offers a wide range
of opportunities to women in terms of employment, income generation, empowerment
and above all self fulfillment. Since a large number of women in rural areas where
 floriculture is practiced are already engaged in growing flowers they have an
opportunity to increase their incomes by taking to modernization in floriculture.
 Aparajita Dasgupta, Tushar Kanti Saha, Arindam Butt & Omkarnath Chattopadhyay
(2010)- The study showed that musculoskeletal problems, diseases of the respiratory
system and eye, accidents, injuries, skin diseases, stress, insomnia, etc are all common
amoung these worker. The ill health is compounded by various socio economic
factors such as poverty, lack of education, poor working conditions, excess working
hours, and poor diet.
Objective of Study:
The major objectives of the study are as follows:
1) To investigate the evolving definition pattern of Indian Micro, Small and Medium
Enterprises (MSMEs)
2) Study of the effect of the 2006 Act on Micro, Small and Medium Enterprise Growth
(MSMED).
3) Study of the opportunities and challenges for MSMEs in India during the time of
liberalisation.
4) To examine the performance of MSMEs in India during the time before and after
liberalisation.
5) Disclosing the contribution of MSMEs to GDP growth

Research Methodology:
The research is focused on secondary data obtained from various secondary sources such as
journals, annual reports, MSME offices, and various other reports that have been published.
The knowledge was provided in the form of a table and interpretations were made in the light
of the above-mentioned study objectives.
Data Analysis:
Data obtained from the Government of India's annual report for Micro, Small & Medium
Enterprises for Micro, Small & Medium Enterprises The year 2012-13 reveals that the total
number of companies in this segment is 361.76 lakhs.15.64 lakhs of which are in Registered
industry where there are 198,74 lakhs in the unregistered field. Around 45% are located in
rural areas in the registered sector. Rural units compose 60 percent of the unregistered
business units. That means the full contribution to the number of units in the MSMM. As it is
about 55.34 percent of the total units, the group is from rural areas. Entrepreneurs from rural
India are therefore bringing in more. In contrast to urban citizens, initiatives to start these
micro, small & medium enterprises and thus Govt. Can think & think & think Develop some
unique strategies to encourage these entrepreneurs to start new projects. If we go deeply into
the numbers, then it is apparent that even female entrepreneurs are now taking part in the
development of these small-scale industries. Women entrepreneurs make up about 26.61 per
cent of the total number of units in this group.

Conclusion
India's MSMEs face a difficult situation because of intense competition from large industries
due to the removal of subsidies, lack of infrastructure, anti-dumping policy, product
standardisation challenges, overall quality control, etc While globalisation has to some degree
increased competitiveness in Indian MSMEs, Indian MSMEs are still not adequately prepared
to compete. A definite change has been made in the mindset of the Govt. From defence to
MSME promotion. Govt. The Govt. Several policy steps have been taken, but they need to
ensure proper coordination and execution of these schemes. Via improved production,
product diversification, supply chain management, research and development activities,
MSMEs have to turn the challenges of globalisation into opportunities.

References
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