d - Mahratta Chamber Of Commerce Industries & Agriculture Pune

(around 6000) that have both
employment as well as poverty
implications.
Contribution of MSE Sector
The MSE sector no doubt is a vital part
of Indian Economy. According to
Eleventh Five Year Plan (Vol. III, P 195)
the MSE sector accounts for “…… 95%
of the industrial units …………. and 34%
of exports. They manufacture over 6000
product ranging from handloom sarees,
carpets, soaps to pickles, papads and
machine parts for large industries.” The
plan further states that (p. 199), “Non
traditional products account for more
that 95% of the SSI exports. The
performance of garments, leather and
gems and jewelry units has been
remarkable in the last decade…. sector
dominates in export of sports goods,
ready made garments, woollen
garments and knitwear, plastic
products, processed foods and leather
products.”
One is not sure as to how far the
performance of small sized enterprises
in India is shaped by an elaborate
package of promotional and protective
devices. It is difficult to establish even a
rough correspondence between the
instruments of policy and their outcome.
However, an essential step towards
understanding the various facets of
small firm growth would be to have an
assessment of the relative importance
of these enterprises as part of the
industrial system. It may be noted that
the information lacks precision and
diverse data sources depicting size
class changes often lack mutual
consistency. In addition, several studies
point out that small enterprises tend to
conceal income and employment and
the large size units often use MSE
Sector as ‘Parking Place’ to take
advantage of concessions meant for
small size units.
Contribution to National Income
Given this caveat, the relative share of
small-sized enterprises can be
assessed in terms of its contribution to
value added and employment. In both
cases we study, to the extent possible,
the relative share of MSE sector as part
of the industrial economy, which in turn
is treated as part of the total economy. It
is seen that the relative share of the
secondary sector (manufacturing,
construction and power generation) in
terms of value added rose rapidly up to
the mid-1960s from 14.0 per cent to
Table – 3
Gross Domestic Product at Factor Cost by Industry of origin of constant
(1999-00) – Prices Percentage Share
Year Primary Secondary Tertiary
1950 - 51 56.7 13.7 29.6
1962 - 63 49.2 18.5 32.3
1966 - 67 44.1 21.2 34.7
1972 - 73 42.9 22.9 34.1
1977 - 78 42.3 23.3 34.4
1983 - 84 38.7 24.4 37.7
1987 - 88 32.9 26.1 41.1
1993 - 94 31.0 26.3 42.8
1999 - 00 25.2 26.7 48.1
2004 - 05 20.2 26.1 53.7
2007 - 08 19.3 26.3 54.4
Source: Derived from Economic Survey – 2010-11
Table – 4
Relative Share of Registered and Unregistered Enterprises the value added
by Manufacturing (1999-00 prices)
Percentage Share
Year Registered Unregistered
1979 – 80 52.6 47.4
1996 – 97 66.6 33.4
2007 – 08 67.6 32.4
Source : Mazumdar (2011)
Table – 5
Sectoral Shares in Employment in India – 1972-73 to 2004-05
Sectoral Shares in Employment (%)
Year Primary Manufacturing Secondary Tertiary
1972 - 73 73.9 8.8 11.3 14.7
1977 - 78 71.0 10.2 12.6 16.3
1983 - 84 68.3 10.7 13.8 17.6
1987 - 88 64.8 11.1 15.9 19.1
1993 - 94 63.9 10.7 15.0 21.1
1999 - 00 60.2 11.0 16.2 23.7
2004 - 05 56.5 12.2 18.7 24.8
Source: Bhalla (2009)
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