Impact of public sector banks assistance to MSME: a case study with reference to MSME and their performance

The presented research study maks an critical analysis on the assistance of Public Sector banks to MSMEs and its effect on their performance. The research concludes that efficient management and enhancement of MSMEs will boost the employment and enhance the country’s GDP.
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Impact of public sector banks assistance to MSME: a case study with reference to MSME and their performance International Journal of Management (IJM) Volume 11, Issue 2, February 2020, pp. 1–13, Article ID: IJM_11_02_001 Available online at http://www.iaeme.com/ijm/issues.asp?JType=IJM&VType=11&IType=2 Journal Impact Factor (2020): 10.1471 (Calculated by GISI) www.jifactor.com ISSN Print: 0976-6502 and ISSN Online: 0976-6510 © IAEME Publication Scopus Indexed IMPACT OF PUBLIC SECTOR BANKS ASSISTANCE TO MSME: A CASE STUDY WITH REFERENCE TO MSMEs AND THEIR PERFORMANCE Krishnaswamy Ramaswamy Research Scholar, RTM Nagpur University, Nagpur, India Rajesh Vaidya Assistant Professor, Department of Management Technology, Shree Ramdeobaba College of Engineering and Management, RamdeoTekdi, Katol Road, Nagpur, India Mangipudi Mruthyanjaya Rao and KDV Prasad RTM Nagpur University, Amaravati Road, Nagpur, Maharashtra, India ABSTRACT The Gross Domestic Product of a country indicates the prosperity and wealth of a country. In the recent past India has become one of the fastest growing countries and completing with the most advanced and developed countries in several areas. The Micro, Small and Medium Enterprises are small enterprises carry out the manufacture and allied activities will also contribute significantly to GDP, including one-third of India’s manufacturing output. In India, 12 crores were employed through MSMEs and contribute to 45% of overall exports Most the developed countries contribution to GDP is more than 50%, and Centre for Economics and Business Research, 2018 reported that Indian would overtake both France and UK GDP by 2032. To achieve the countries ambition of 5 Trillion economy, there is an urgent need to strengthen the MSME in India. Therefore, the presented research study maks an critical analysis on the assistance of Public Sector banks to MSMEs and its effect on their performance. The research concludes that efficient management and enhancement of MSMEs will boost the employment and enhance the country’s GDP. Keywords: Growth, MSME, Public Sector Banks, Performance, Impact. Cite this Article: Krishnaswamy Ramaswamy, Rajesh Vaidya, Mangipudi Mruthyanjaya Rao and KDV Prasad, Impact of Public Sector Banks Assistance to MSME: A Case Study with Reference to MSMEs and their Performance, International Journal of Management (IJM), 11 (2), 2020, pp. 1–13. http://www.iaeme.com/IJM/issues.asp?JType=IJM&VType=11&IType=2 http://www.iaeme.com/IJM/index.asp 1 editor@iaeme.com Impact of Public Sector Banks Assistance to MSME: A Case Study with Reference to MSMEs and their Performance 1. INTRODUCTION A country's productivity and rating is determined by its G.D.P. (i.e.) Gross Domestic Products, which consists of the value of the goods and services it produces throughout the year. Every nation aims to raise GDP in order to improve the country and its people in order to live with more stability, peace and wealth. Our nation has also become one of the fastest growing countries on a par with advanced and developing countries. Our nation is basically agriculture based and our production of goods and services are par excellence with advanced countries enabling more export earnings. The Govt. of India, various State Governments, support for achieving higher GDP thro‟ various schemes, notifications, concessions to enable big industries and also small units to increase the output of goods and services. The PSU Banks under the guidance of RBI play a vital role in achieving above. The GDP of India during 2017-2018 is around 7% and expected to be 7.4% to 7.7% during 2018-2019. The GDP of India consists of Contribution of 57% from production of goods, 26% from services and 17% from Agriculture sector. The GDP of India has doubled in a decade (Economic Survey 2017-18). While big industrial houses produce in a big way, the MSME viz. Micro, Small and Medium Enterprises too contribute for the GDP. The Indian MSME Sector is the major contributor to the national economy providing it resilience to ward off global economic stress and adversities with around 36.2 million units of MSME across India. The MSME contribution is 6.11% of manufacturing GDP and 24.63% of GDP of service sector as well as 33.4% of India‟s manufacturing output (about 1/3) and providing employment to 12 crore persons. Further it is contributing forty-five (45%) percent of overall exports from the country. The Centre for Economics and Business Research reported in July, 2018 mentioned that India would overtake both Britain and France this year in terms of GDP and has a chance to become the third highest by 2032. The MSMEs play an important role in providing large scale employment opportunities with comparatively lower capital cost when compared to big business houses. The MSMEs help enhancing the industrialization and employment in backward areas. The Government has also initiated the Pradhan Mantri Mudra Yojana for development and refinancing activities relating to micro industrial units (Economic Survey, 2017-18). 1.1. Brief on MSMEs Even though we got Independence in 1947, the Governments were not very serious to support the Small Scale Industries due to insignificant value individuality, lack of collectiveness and spread throughout India and hence were neglected both by Central Government and various State Governments. Earlier it was not getting proper care as it was called “Small Scale Industries” and virtually got ignored. After five decades viz. on 18.01.2006, the Govt. of India enacted in Parliament MSMED Act, 2006, to enable MSMEs Sector for vibrant growth and installed a s ...