Entrepreneurship at the Grassroots

Taking the view that the official practice of clubbing medium, small, and microenterprises in one category is not sound, this study points out that these categories are substantially different from each other in terms of size, structure, resources, and business perspectives. Microenterprises, in particular, represent a different ecosystem whose nuances must be understood carefully so as to provide suitable inputs for an effective policy on them.

India’s industrial policy has traditionally laid great emphasis on medium, small, and microenterprises (MSMEs) on the grounds that they have the capacity to generate output and employment with relatively less capital than large industries. They also help to make industrialisation more broad-based and involve small and micro entrepreneurs at the grassroots level. The MSME sector was not to be perceived simply as a cluster of small enterprises but as one that would play an important role in providing a means of livelihood and income to the poorer sections of society.

These expectations have been fulfilled to an extent. According to the 73rd round of the National Sample Survey (NSS) during 2015–16, the estimated number of workers in unincorporated, non-agricultural MSMEs in the country was 11.10 crore. According to the Central Statistics Office, the share of MSME-related gross value added (GVA) in the national GVA during 2016–17 was 31.8%. As per the Directorate General of Commercial Intelligence and Statistics (DGCIS) figures, the MSME sector accounted for 48.10% of the country’s exports in 2018–19. Given its huge size and significance for the economy, all aspects of the sector merit a careful scrutiny, so that the right kind of policy inputs can be derived to enable it to perform to its potential. This paper deals with a specific aspect of the MSME sector—the unorganised, informal micro industries section. It is an attempt to understand the dynamics of entrepreneurship at the base of the industrial structure and to analyse its role in the development process of the economy.