Page 15 - IMDR MSME BOOK 2021

Managing Finance in Micro, Small & Medium Enterprises
laws, property rights, issues of adverse selection and
moral hazard

The MSME sector is capable to spread industrial growth
across the country and can be a major contributor in the
process of inclusive growth. MSMEs play an important
role in economic development of the country through its
substantial contribution to domestic production,
boosting exports, capacities to develop appropriate
indigenous technology, import substitution, setting up
technology – oriented industries, low investment
requirements, operational exibility, location wise
mobility, low intensive imports, competitiveness in
domestic and export markets thereby generating new
business opportunities and offering employment to
youth of the county.
Evolution of MSME in India

In India, the area has been by and large alluded to as the
Micro, Small and Medium Enterprises. Recently the
MSME sector has consistently reported higher
development rate and got recognition in its contribution
in overall economic development. The distinctive feature
of the MSME sector, that is, business potential at low
capital expense makes it an attractive opportunity. Since
independence, the Government of India has dened and
designed strategic goals to advance development in the
nation. The evolution of the policy framework and
support measures of the Government had been broadly
grouped into the following three periods: 1947-1990: The
Ofce of Development Commissioner for MSMEs had
been set up in 1954. This phase aimed to expanding
employment opportunities, giving proper recognition to
micro and small enterprises and ensuring equal
distribution of the national income and facilitating
efcient mobilization of private sector resources of
capital and skills.