Micro, small, and medium enterprises (MSMEs) form the backbone of the Indian economy. With 45 percent share of manufacturing output, more than 40 percent of exports and over 28 percent share of GDP, MSMEs provide jobs to about 111 million people. They are key drivers of inclusive and sustainable economic growth and poverty reduction and are breeding grounds for entrepreneurship. However, they face many constraints and remain vulnerable to external shocks. However, poor availability of data on the MSME sector affects a better understanding of their evolving patterns, opportunities and constraints faced by them. ISID’s work under this theme is addressing some of the data constraints by conducting primary sample surveys and simulations in the economy-wide models to develop a better understanding of their roles. ISID is also exploring the potential of Start-Ups for development.
The G-20 has emerged as an important platform for discussions on global economic and financial architecture. The upcoming Indian presidency of the G-20 from December 2022 presents India an opportunity to shape a more development-friendly global economic and financial architecture that supports the process of the manufacturing sector in India and other late-industrializers by retrieving some of the policy space lost over time in the multilateral trade and financial negotiations. ISID proposes to put together some issues for reform and engage in policy advocacy to facilitate their discussion at the G-20 meetings.
Research Team: Prof Nagesh Kumar ++
Status: [Proposal Stage]
Given that majority of MSMEs are informal, they have been facing several challenges and have been the worst affected from the lockdowns imposed during the COVID-19 pandemic. Many of them had to close their businesses while others have scaled down their operations because of demand and supply constraints. ISID is developing scenarios of the role that MSMEs can play in India’s industrial transformation within the framework of Computable General Equilibrium (CGE) models.
Research Team: Dr Akhilesh Kumar Sharma
Status: [Ongoing] Project launched in 2022-23; time frame: 18-24 months.
The proposed study aims to understand factors enabling the survival of MSMEs during the COVID-19 pandemic, their coping strategies, major challenges and opportunities, efficacy of government policies in revival of the sector, and to identify factors for the resilient and sustained growth of MSMEs amidst uncertainties. It will be based on both primary and secondary data. Mixed method approach will be used for analysis. Primary data will be collected through a semi-structured questionnaire from around 600 small firms of selected MSME clusters located in different regions of the country. Snowball sampling will be used to identify sample firms for the study. Appropriate statistical methods will be used for the analysis. Findings will add to the understanding of policymakers and researchers about issues pertaining to COVID-19 and MSMEs and help them to design appropriate policies for resilient and sustained growth of the sector.
Research Team: Dr Akhilesh Kumar Sharma and Dr Ajit Jha
Status: [Ongoing] Project launched in 2022-23; time frame: 18 months.
New technologies such as e-Commerce and digital marketing can be a really powerful tools especially for women-led MSMEs enabling them to conduct their economic activities from the convenience of their homes. ISID collaborated with UNESCAP SSWA Office to organize a roundtable discussion on the role that the new technology can play in empowering women entrepreneurs at a special session of the FIWE-ISID-MSME International Conference on “Women-led MSMEs as Catalysts of Transformation” on March 24, 2022. The distinguished speakers of the session included Mrs. K. Ratnaprabha, Former Chief Secretary, Government of Karnataka & President, UBUNTU; Dr. Rajan Sudesh Ratna, Dy. Head, UNESCAP-SSWA Office; Mr. Anurag Awasthi, COE Manager, GeM; Ms. Shirley Jayawardena, President, Federation of Chambers of Commerce and Industry of Sri Lanka (FCCISL); Ms Arundhati Mukherjee, Marketing Consultant. The session was moderated by Prof. Nagesh Kumar, Director, ISID. The roundtable highlighted the potential of women-led MSMEs in the development of the economy in terms of potential contribution to the GDP, and creation of millions of additional jobs and incomes. It discussed the challenges faced by women entrepreneurs in accessing markets and accessing finance and technology on equal terms. In this context reference was made to the Government of India initiative of Government–e-Marketplace (GeM) – an online public procurement platform that is also helping women entrepreneurs participate in government procurement. It also highlighted the UNESCAP-SSWA initiative to build the capacity of women entrepreneurs to leverage new technology such as digital marketing and e-Commerce. The report of the Roundtable has been submitted to UNESCAP-SSWA. Prof Nagesh Kumar was the project coordinator.
This project will address issues pivotal to the fintech revolution. Some of the new initiatives include FinTech/silicon ecologies incubating UK-India firms for innovative financial services; funding conduits for infrastructure and green finance; and regulatory frameworks to ease market access for UK-India FinTech firms. Besides promoting bilateral business in financial services, the project would contribute significantly to the cause of inclusive development addressing financial inclusion, digital empowerment, and start-up ecosystem. It is being undertaken jointly by teams from India and the United Kingdom for three years.
Research Team: India: Prof Sachin Chaturvedi and Dr Priyadarshi Dash (RIS), Prof K J Joseph (GIFT), Dr Reji K Joseph (ISID); UK: Prof T G Arun and Prof Sheri Markose (University of Essex), Prof Victor Murinde, (University of London), and Dr Philip (Kostov University of Central Lancashire).
Collaborator: Funding: Supported by ICSSR and ESRC
Status: [Ongoing]; time frame: 36 months from March 2021
The study aimed to understand the criticality of flow of funds for robust growth of MSMEs. Through theoretical and empirical underpinnings, the study observed that access to credit is critical for the performance of small firms. Although credit flow to MSMEs has increased over time in the recent decade, it has declined in terms of share of non-food credit and priority sector advances, which indicates increase in credit problems in MSMEs. The major constraints affecting MSME lending include poor entrepreneurial mindset of small entrepreneurs, poor selection of applications under schematic lending, fear of accountability if loan turns NPA, prevalence of corrupt practices in selection of applications, and lack of financial documents/statements, lack of awareness and financial literacy, lack of skilled and sufficient staff at branch level. In order to improve the credit flow to MSMEs, multipronged strategies involving all key stakeholders – banks, firms, and government institutions – are required. The project was sponsored by a consortium of public sector banks, namely State Bank of India, Bank of India, UCO Bank, Canara Bank, Corporation Bank, and United Bank of India. The research team included Mr Pradyuman Singh Rawat (Project Director), Dr Akhilesh Kumar Sharma (Principal Investigator), Prof M R Murty, Dr Sangeeta Ghosh, and Dr Mitali Gupta.
- Understanding the Impact of Covid-19 on MSMEs in India: Lessons for Resilient and Sustained Growth of Small Firms, Akhilesh Kumar Sharma, WP243, February 2022
- Expanding Productive Employment Opportunities: Role and Potential of the Micro and Small Enterprises Sector, WP106, March 2007
- Subcontracting in India’s Small Manufacturing Enterprises: Problems and Prospects, WP102, January 2007
- Enhancing Credit Flow for Accelerating the Recovery of MSMEs: Some Policy Lessons, PBs #22-04, August 2022
- Reigniting Sustainable Growth of MSMEs in the Aftermath of Covid-19 Pandemic, PB #21-02, September 2021
- The Rise of Urban Tech Start-Ups in India Spearheading Urban Transformation, M.M.K. Sardana, DN2019/02, April 2019
- The Flipkart-Walmart Deal: A Look into Competition and Other Related Issues, Beena Saraswathy, DN2018/07, September 2018
- Action Plan for Startup India, M.M.K. Sardana, DN2016/03, April 2016
- Small and Medium Enterprises in India: Infirmities and Asymmetries in Industrial Clusters,, Satyaki Roy, June 2013, Satyaki Roy, June 2013
- Jaya Prakash Pradhan and Partha Pratim Sahu (2008), Transnationalization of Indian Pharmaceutical SMEs, Bookwell Publishers, New Delhi.,, , August 2008, August 2008
- Formalising the Informal Through GST: Evidence from a Survey of MSMEs, Sangeeta Ghosh, Review of Development and Change, October 2022
- Book Review – Organising Entrepreneurship and MSMEs across India, ed by Léo-Paul Dana, Naman Sharma and Satya Ranjan Acharya, Akhilesh Kumar Sharma, International Journal of Entrepreneurship and Small Business, Vol. 45 (2), pp. 258-261, June 2022
- Implications of Policy Initiatives for MSMEs amid Economic Disruptions Caused by COVID-19, Akhilesh Kumar Sharma, , VIKALPA -The Journal for Decision Makers, Vol. 47 (1), January-March, pp 1– 12, March 2022
- Impact of Institutions on the Performance of Firms in India: Towards Policy Implications for MSMEs from Empirical Evidence, Akhilesh Kumar Sharma, in Chosein Yamahata, Donald M Seekins, and Makiko Takeda (Eds) Social Transformations in India, Myanmar, and Thailand, Vol. I, Palgrave Macmillan, Singapore, pp. 195–212, July 2021
- Examining the Covid-19 Relief Package for MSMEs, Sangeeta Ghosh, in Uma Kapila (Ed) Coronavirus Pandemic: Lessons and Policy Response – Economic Developments in India (EDI), Vol. 250, Academic Foundation, New Delhi, pp. 169–177, September 2020
- Making FTAs More Inclusive – A Case for Promoting SMEs in India, Anjali Tandon, paper for Policy Hackathon on Model Provisions for Trade in Times of Crisis and Pandemic, conducted by the United Nations ESCAP , September 2020
- Book Review- Fintech for Asian SMEs, by Naoko Nemoto and Naoyuki Yoshino (Eds), Asian Development Bank Institute, Akhilesh Kumar Sharma, Journal of Asian Economic Integration, Vol. 2, No. 1, pp. 122–125, June 2020
- Examining the Covid-19 Relief Package for MSMEs, Sangeeta Ghosh, Economic & Political Weekly, Vol. 55, No. 22, pp. 10–12, May 2020
- Small Businesses, Big Reform: A Survey of MSMEs Facing GST, Sangeeta Ghosh, Economic & Political Weekly, Vol. 55, No. 18, pp. 32–39, May 2020
- Impact of Prevalence of Credit Problems on the Performance of MSMEs in India, Akhilesh Kumar Sharma, Pradyuman S Rawat, Seminar Papers, The Tenth National Seminar on Industrial Statistics, Kolkata: Industrial Statistics Wing, Data Processing Division, National Statistical Office, Ministry of Statistics and Programme Implementation, Government of India, September 2019
- Impact of ICT Usage on Productivity of Unorganised Manufacturing Enterprises in India, Mitali Gupta and Manik Kumar, The Indian Journal of Labour Economics, Vol. 61, No. 2, pp. 411–425, September 2018
- Determinants of Access to Institutional Credit for Small Enterprises in India, Jesim Pais, Yuko Nikaido, and Mandira Sarma, in Takahiro Sato (Ed) The BRICs as Regional Economic Powers in the Global Economy, Comparative Studies on Regional Powers, No. 10, Slavic Research Centre, Hokkaido University, Japa, August 2012
- Subcontracting in India’s Micro and Small Manufacturing Enterprises: An Exploratory Analysis, Partha Pratim Sahu, in Keshab Das (Ed) Emerging Issues in Micro and Small Enterprises in India: Era of Reforms, Routledge, pp. 185–207, May 2011
- Technological Constraints of Small Scale Industries in India: Some Evidence from a Field Survey, Partha Pratim Sahu, in S K Bhaumik (Ed) Reforming Indian Agriculture: Towards Employment Generation and Poverty Reduction, Sage Publications, New Delhi., April 2008
- Unorganised Manufacturing, Flexible Labour and the ‘Low Road’: Lessons from Contemporary India, Satyaki Roy, in Debdas Banerjee and Michael Goldfield (Eds) Labor, Globalisation and the State Workers, Women and Migrants Confront Neoliberalism, Routledge, May 2007
- Employment in Unorganised Manufacturing in India: Post-reform Trends and Future Directions, G K Chadha and Partha Pratim Sahu, Sarvekshana, 89th Issue, Vol. 26, No. 2, July, pp. 1–23. , July 2006
- Book Review- Small-Scale Industry in India: Large-Scale Exit Problems, by Bibek Debroy and Laveesh Bhandari (Eds), Jaya Prakash Pradhan, Indian Journal of Labour Economics, Vol. 49, No. 3, pp. 574–576., June 2006
- Small and Micro Enterprises in a Globalising Economy: Some Perspectives on Policy Framework for their Integration, T S Papola , Indian Journal of Labour Economics, Vol. 47, No. 4., October 2004
- In pandemic shock, critical lessons for MSMEs, Akhilesh Kumar Sharma, The Hindu, April 12, 2022
- Micro enterprises need exclusive treatment, Anjali Tandon, The Hindu, BusinessLine, April 23, 2021
- Higher import tariffs will hurt Atmanirbharta, Anjali Tandon, The Hindu, BusinessLine, March 31, 2021
- Covid-19 and MSMEs: Addressing Information Barriers, Anjali Tandon, Madhyam, July 7, 2020