Problem of MSME's in India

This presentation focusses on various problems which are faced by MSME's in India and suggest the ways to solve them.

1. PROBLEM OF MSME’s IN INDIA CHANDNI AGARWAL Semester III (MBA – M52) MONIRBA, University of Allahabad

2. OBJECTIVE OF THE PRESENTATION To know various problems that affect the growth of micro small and medium enterprises. To determine the extent to which these factors affect the growth and survival of enterprises.

3. VARIOUS PROBLEMS

4. LACK OF CREDIT The banks are not providing adequate amount of loans to MSME’s. The owners of MSME’s has to produce different type of papers for their worthiness. The interest rate from other sources of loans are very high.

5. COMPETITION FROM MNC’s Globalization is hampering the success of MSME’s. The big companies are able to provide better quality at cheap prices. Big companies have advantage of their position in market .

6. POOR INFRASTRUCTURE Because of poor infrastructure, low production capacity at high cost. Issues of storage. Inadequate infrastructure facilities including power, water, roads etc.

7. LACK OF SKILLED LABOR AND TRAINING Skilled manpower is not available to MSME’s. The training and development programs conducted by MSME’s are not sufficient.

8. UNAVAILABILTY OF RAW MATERIALS For MSME’s required raw material, skilled work force and other inputs are not available in the market. Results in high production price or low product quality.

9. LACK OF TECHNOLOGY The owners of MSME are not aware of the latest technology. The methodology used is outdated. Absence of in-house research and development.

10. LACK OF MARKETING SYSTEM Unable to spend large amount on development of marketing facilities. The ineffective advertisement and poor marketing channels due to lack of resources lead to poor selling. Designing, packaging and product display.

11. COMPLEX LABOR LAWS Various laws and regulations stops the growth of industries. Few of them are very complex. There are 44 central laws and more than 150 state laws on the labor laws.

12. HUGE NUMBER OF BOGUS FIRMS Misuse of government subsidies and incentives by entrepreneurs. Creates problem for genuine firms to gain help from government.

13. SUGGESTIONS FOR IMPROVEMENT Mutual supply of Technologies Constitution of Panel of Consultants Determination of technological needs Training and awareness programs Relaxation in labor laws Adequate credit arrangement Regular supply of raw material and inputs