Problems and prospects of Indian MSMEs: a literature review

MSMEs have been playing an important role in overall economic development of a country like India where millions of people are underemployed or even unemployed. This sector solves many problems viz. poverty and unemployment through providing immediate and large-scale employment, with lower investments and proves to be a second largest manpower employer, after agriculture. Small-scale industry is one of the major planks of India's economic development strategies since Independence. With the advent of planned economy since 1951 and the subsequent industrial policy followed by Government of India, both government and planners earmarked a special role for this industry in the Indian economy. India, being one of the fastest growing economies of the world, needs to pay an honest attention for the utmost growth of MSMEs for its increased contribution in above areas. The present study investigates the literature to identify major problems faced by MSMEs in the competitive environment. It also focuses on the factors contributing towards enhanced manufacturing performance of Indian MSMEs.