Challenges of MSMEs in India

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Commodore Sushil Kumar Patel, Dr Rajesh Tripathi


Purpose: To do primary research on the MSME challenges and impeding factors, which are derived from literature study (secondary data) on the subject. There are numerous literatures on MSME challenges, most of them being expert opinion, people speak, Government and Industry data, academic study etc. Very few are primary research. This paper focuses on literature research to derive the salient factors (challenges) to MSMEs. These factors have been further subjected to primary research through questionnaire-based survey using Likert scale. Hypotheses formulated and statistically tested to derive concrete results.
Scenario Brief: The Micro, Small and Medium Enterprises (MSMEs) are industry’s innovation engine, and a pillar of economic development for India, so as any other developing / developed nation. It contributes to industrial production, employment generation, GDP growth, regional development, export earnings, economic diversification, social stability and indigenous self-reliance. The first part of this paper is exploratory research which aims to present the role of MSME in the Indian economy. This vibrant sector also faces a number of challenges despite various initiatives taken by the Government. The literature review explores various problems and challenges faced by the MSMEs. It reveals problems of finance, marketing, technology, human resource, operations, export potential, lack of strategic management, financial literacy, talent retention based on secondary data. Difficulty to acquire timely funds for working capital needs, complicated documentation, lack of consultancy support, need-based research programs, lack of the latest technological skills, low ICT literacy, lack of motivation, presence of high employee attrition, poor-quality products, lack of foreign quality certifications, inefficient logistics, poor bargaining power, informational and infrastructural gaps, complicated laws, policy uncertainty, etc. are some such problems. Some of these salient factors have been put to primary research-based tests in order to establish the truth. Some efforts have also been made to suggest remedial options.

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