Question

Explain the advantages of MSMEs?

Answer 1

1. Employment Potential: MSMEs generate more employment opportunities than large business concerns.
2. Low Production Cost: MSMEs do not require skilled labourers or professionals to run the organization. It employs cheap labour and thus minimizes the overhead.
3. Low Investment: MSMEs do not require huge capital to start the unit. It can employ locally available resources within the reach of the owner.
4. Quick Decision Making: MSMEs need not hire professional managers to run the management on a day to day basis.
5. Supplementary Role: MSMEs play a complementary role to serve as a feeder to large scale industries.
6. Establishment of Socialistic Pattern of Society: MSME sector contributes towards the establishment of a socialistic, pattern of society by reducing the concentration of income and wealth.
7. Balanced Regional Development: By encouraging MSMEs in industrially backward areas of India, balanced development can be achieved across all regions.
8. Promotion of Self Employment and Self Reliance Spirit: MSMEs help a great deal in developing a class of entrepreneurs.
9. Higher Contribution to Manufacturing and Export: MSMEs contribute 45% to the total manufacturing output and 40% to the exports from the country. It helps in earning precious foreign exchange in various countries across the world.