Micro, Small, and Medium Enterprises (MSMEs) are the backbone of the Indian economy and of many other developing economies. They work to diminish poverty by providing gainful employment opportunities to a large number of people in the country at a relatively low capital cost. They encourage innovation and propel industrialization of rural and backward areas, reducing regional imbalances, and assuring a more equitable distribution of national income and wealth. MSMEs today are widening their domain by producing a diverse range of products and offering services across different sectors of the economy, catering to myriad demands from both domestic and global markets.
As per the data available by the Central Statistics Office, MSMEs have been contributing roughly 30% to the total GDP of India. Despite infrastructural, technological, transportation, and communication issues, and despite a dearth of market linkages and challenges hampering movement of institutional credit, MSMEs, in the past decade, have seen exponential growth leading to higher employment of rural populations– of artisans and weavers and of those involved in agriculture and allied services.
The sector generates over 11.10 crore jobs promoting vocational skills and employment opportunities among the most vulnerable sections of the society. It also plays an important role in improving and developing rural and semi-urban areas as production hubs and centres of economic development leading to overall socio economic development of society and improvement in living standards for a large number of people.
The 73rd round of the National Sample Survey found that there are approximately 633.88 lakh non-agricultural MSMEs in the country, out of which, more than 99% are Micro units. MSMEs have a strong standing in both rural and urban areas of the country, their percentage share being 51% and 49% respectively. They constitute 35% of direct exports, providing employment to over 28 million people. In fact, 80% of the total number of industrial enterprises in India are MSMEs.
The North East Region (NER), currently home to only 1.5% of MSMEs in India, is a rich gamut of cultures, unique tribes and a plethora of distinctive crafts– it possesses tremendous potential to become the hub of Micro Small and Medium Enterprises in the country. The sectors having huge potential in the region are Agriculture, Food Processing, Handloom and Handicrafts.
The NER comprises of eight states, namely, Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, and Tripura. Its ecology provides a perfect environment for the growth of horticulture, quality spices, medicinal and aromatic plants. Also, the region is home to many 'in demand' and unique products such as, Eri Silk, Muga Silk, Naga Mirchi, and many handicrafts created out of sustainable natural fibers like Bamboo and Cane.
While most MSME units in NER, like in the rest of the country, are micro units, what makes the NER MSME experience unique is that a majority of these are women owned and women operated household industries, their work based largely on adding value to natural fibres and organic farming. Most social entrepreneurs in the region work with women farmers, artisans, and weavers and women form an integral part of the NER MSME value chain, right from production and processing to packaging and marketing.
Further, the region's geographical location and proximity to the south and southeastern nations gives it an inherent trading advantage. But while India's trade with its neighbouring countries such as Nepal, Bhutan, Bangladesh, Cambodia, Lao PDR, Myanmar, Thailand and Vietnam has grown at a Cumulative Annual Growth Rate (CAGR) of 23%, the NER's share in this trade has remained static, hovering consistently in the range of 1-2%, and contributing to a mere 5% of the total exports from India to Bangladesh, Myanmar and Bhutan. However, a vast amount of agricultural, handicraft and handloom produce tends to get exported through small markets and mediators taking advantage of the proximity and convenience of transport to these countries. This not only takes away from national income but yields no practical benefits to the producers or to the region as a whole.
Overall, the NER MSMEs have an abundance of natural resources to tap into and a skilled and dedicated work force to build upon. They have the wherewithal to contribute to and benefit from the huge export potential of the region given a little hand holding vis-à-vis markets and trends, the right training, and a push in the right direction.