What is Micro Small and Medium Enterprise?
Small business in India is key to India’s growth. The Micro Small and Medium Enterprise in India is a vibrant and dynamic sector of the Indian economy. Over the last five decades, it has made massive contributions to the economy as compared to other sectors.
[blockquote align=”none” author=””]Small business is the backbone of our economy.[/blockquote]
This sector has been providing large employment opportunities at comparatively lower capital cost than large industries but also help in the industrialization of rural and backward areas.
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According to the government data, SMEs provide employment to over 120 million persons. Through more than 6,000 products, the sector contributes about 6.11 % to the country’s GDP besides 45% of the total manufacturing output and 40% to the exports from the country.
The MSME sector has the potential to bring industrial growth in the country and spread across all corners; and, it can also be a major partner in the process of inclusive growth.
Why should we encourage small business?
When we talk about small business, we are either referring to a service or retail operations like grocery stores, medical stores, tradespeople, bakeries and small manufacturing units. In a country like India where the population is high, these kinds of businesses should be encouraged and concentrated due to the following reasons:
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Labor-Oriented
The government cannot provide jobs to each and every graduate. SMEs somehow lift the burden of the economy by providing several job opportunities in the rural and semi-urban areas.
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Community-based
SMEs usually target local communities and areas. It will be a chaotic situation if everybody moves to the urban areas in search of jobs, but the coming of small businesses has made it easy to meet the needs of local people. By providing jobs for meeting the requirements of the local community, this sector is playing a significant role.
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Locally made products
There are still a number of people who prefer locally made products over others unknown. Shopping from a known person creates a sense of trust and bond between them. The customer knows the quality of products buys with no hesitation. And, when you buy locally, you often get fresh and organic products.
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Diversity
As compared to big businesses, small businesses are more flexible. They are able to adapt to the economic change which also makes them be more customer-based. Anybody can come up with any invention of innovation; this, however, makes them more diverse in many forms like culture, function, potential etc.
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Increasing the Tax Base
When local residents shop from shops in their communities, their tax stays within the local economy, and in return, they are able to contribute to the local community. Likewise, small business tends to focus more on such community and overall contribute to the entire society and economy.
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