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MSME And Business Entrepreneurship NCERT Textbook With Solution PDF Free Download
Chapter 5: MSME And Business Entrepreneurship
Micro, Small, and Medium Enterprises (MSME) contribute significantly to the development process and acts as a vital link in the industrialization in terms of production, employment, and exports for economic prosperity by widening the entrepreneurial base and use of local raw materials and indigenous skills.
MSME dominates the industrial scenario in the country with a sizeable proportion of labour force and tremendous export potential.
MSMEs play a significant role in economic growth and contribute to 29.7 percent of GDP and 49.66 percent of exports. The sector offers employment to nearly 60 million people through 28.5 million enterprises, after the agriculture sector.
MSMEs are complementary to large industries as ancillary units and form an integral part of the value chain for building a conducive environment for indigenous skills, grass root innovations and entrepreneurship development.
This sector produces a wide range of products, from simple consumer goods to high-precision, sophisticated finished products.
Recognizing the potential of this sector for national development, this segment of the industry is encouraged in both in pre-reform and post–reform periods for fulfilling the objective of selfreliance and rural industrialization.
In India, the MSME consists of both ‘traditional’ and ‘modern’ small industries. This sector has eight subgroups.
They are handlooms, handicrafts, coir, sericulture, khadi and village industries, small-scale industries, and power looms.
The Khadi and Village Industries and Coir segment is another major contributor to the growth of the MSME.
Many global companies are increasingly looking to Indian MSMEs for strategic partnerships of mutual benefit due to the innovative capabilities in niche of low-cost manufacturing and local skills and capabilities.
The emergence of a large service sector has necessitated the government to include other enterprises covering both Small Scale Industries (SSI) sector and related service entities under the same umbrella.
Expansion of the small enterprises was taking place growing into medium enterprises and they were required to adopt higher levels of technologies in order to remain competitive in a fast globalising world.
Thus, it was necessary to address the concerns of such enterprises as micro, small and medium and provide them with a single legal framework.
The MSMED Act, 2006 came into force w.e.f., October 2006. The Micro, Small, and Medium Enterprises Development (MSMED) Act, 2006 addressed these issues relating to its definition, credit, marketing and technology up gradation.
Medium-scale enterprises and service-related enterprises also come under the purview of this Act.
| Author | NCERT |
| Language | English |
| No. of Pages | 17 |
| PDF Size | 1.5 MB |
| Category | Business Studies |
| Source/Credits | ncert.nic.in |
NCERT Solutions Class 11 Business Studies Chapter 9 MSME And Business Entrepreneurship
1. How do small-scale industries contribute to the socio-economic development of India?
Small scale industries contribute for socio-economic development in the following ways:
1. Small scale industries constitute the largest share of industries in India. It accounts for around 45% of total exports. Some of the most prominent industries are gems and jewellery, sports goods, handicrafts etc.
2. Small-scale industries employ the second most number of people only after agriculture and also generate more opportunities for employment as per capital invested.
3. By manufacturing simple products with a minimum capital investment they benefit the people of the region and help eradicate regional imbalances with respect to industrial development.
4. By ensuring rapid decision-making it is enabling the faster implementation of projects that results in enhanced output.
5. It requires very less capital to start, so it is providing a means to interested citizens to become self-employed
6. Custom made products for the citizens who want customized solutions.
2. Describe the role of small business in rural India.
Small scale businesses help the economy in following ways:
1. Small-scale industries especially rural and cottage industries play a major role in providing employment opportunities to the population in rural areas. It is very helpful for people who are economically weak.
2. Small-scale industries play a role in the distribution of income by providing the opportunity to set up industries all across the country.
3. As small scale businesses are active throughout the year they provide employment opportunities round the year and hence help in combating seasonal unemployment and improve conditions of the rural people.
4. Small scale businesses help drive the growth of economy. It accounts for 45% of overall exports which greatly contributes to economy.
5. It helps in developing the rural areas and stops inflow of rural population into urban areas in search of employment.
3. Discuss the problems faced by small scale industries.
Small scale industries face the following problems:
1. There exists a lack of funds for people starting in this sector as an investment is mostly self-financed and the other source of funds can be from moneylenders or local financial agencies or agents.
2. Small industries often face a shortage of raw materials due to the unavailability of finance, also the lack of a proper supply chain and logistics in rural areas results in a shortage of raw materials that hinders proper functioning.
3. As the wages are less, they are able to hire semi-skilled labourers which results in lack of talented manpower that impacts their efficiency.
4. The small scale industries are unable to spend more on marketing due to lack of funds
5. The products need to be sold in the market and this is done by help of middlemen, that leads to eating away of profit.
6. There are many small-scale industries that make use of outdated and also obsolete. It lowers productivity and renders operations non-feasible.
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