Addressing the Gap Areas Crucial for Survival by Focusing on the Key Growth Determinants of Micro, Small and Medium Enterprises in India: A critical analysis Pertaining to Textile Sector MSMEs

Abstract

Micro, small and medium enterprises (MSMEs) are crucial for the overall development of the country. Realising the same, there are various policy support measures introduced by the government. This paper attempts to study the gaps in the present policies available for the MSMEs with respect to the textile sector MSMEs. Through a systematic approach, based on secondary literature and stakeholder engagement, the study attempts to come up with a decision matrix based on the identified key growth determinants of MSMEs. A questionnaire was developed for collecting the responses from expert stakeholders to rank the identified list of determinants influencing the growth of MSMEs. A mix of top-down and bottom-up methodology has been adopted to identify the key determinants of MSMEs having the major influence on the sector’s growth. It was found that the top 10 determinants influencing the growth of MSMEs are profitability, quality of product, entrepreneurial behaviour, legal structure, product differentiation strategy, new/improved products produced, industry friendly policies, employee sensitiveness, ability to fund enterprise growth from profits generated. It is argued that in order to make MSMEs sustainable, policymakers should take a targeted approach focusing on these key growth determinants so as to create a conducive ecosystem for MSMEs. JEL Codes: O100, L210, L250