Economic development is one of the most common terms used in commerce, and it refers to the transformation of the economy from the condition of underdevelopment to the condition of development. Economic development or improvement consists of a constant decrease in the farming portion in GNP and a comparative increase in the portions related to exchange, businesses, administrations, and banking development. The process of industrialization involves raising capital in the process of production.
The country’s economic development eventually culminates in a better quality of life for the majority of its citizens. Various factors are used for measuring and determining the quality of life and it includes education, life expectancy, nutritious food, and life expectancy. Here we will have a brief look at the Medium Scale Industries in the country.
What is a Medium Scale Business?
Before understanding the different aspects related to the Medium Scale Business, it is important to understand the concept of Medium Scale Business. As per the government of India, any business or company can be referred to as Medium Scale that has an overall investment between 5 to 10 crores. The Medium Scale Industries and businesses contribute considerably to the employment, exports, and manufacturing output of the country. As per one of the estimations, this sector has a contribution of 45% in manufacturing production and approximately 40% of the total exports in India.
Understanding the Medium Scale Industries in Brief
The MSME sector presents the maximum opportunities for jobs and self-employment, away from the agricultural sector. The sheer scale of the industry and its inclusiveness is highlighted by the fact that underprivileged groups of society own about 50% of the MSME. The government has formulated various policies in recent times for making this industry one of the significant sectors in the global marketplace.
The Medium Scale Industries have a significant role in the overall economic development of India. The SME industries have contributed considerably towards bringing employment and equality to the workforce in the country. The Medium Scale Industries tend to be labour intensive and thus provide a massive platform for more employment for each unit of the capital employed.
Medium Scale enterprises tend to emulate the output from the low capital of entrepreneurship. There has been a rapid explosion and growth of Medium Scale Industries in India over the years. The Medium Scale Industries have a big role in meeting the sales and production requirements of small-scale as well as large-scale industries.
Employment: Medium-scale enterprises are labour intensive and thus create more employment per unit of capital employed. In all spheres of production in a developing economy, medium scale industries help enlarge the volume of employment with only scarce capital. Medium enterprises emulate output from low capital and entrepreneurship.
Role of Medium Scale Industries in India
|
Capital Size |
Fixed Capital Per Employee |
|
|
1965-66 |
Small |
2018 |
|
Medium |
2044 |
|
|
1974-75 |
Small |
3706 |
|
Medium |
7935 |
|
|
1978-79 |
Small |
16582 |
|
Medium |
27610 |
The above table shows the fixed capital that is spent on employees by a small and medium enterprise.
Equality: It suggests that the income generated in a large number of medium enterprises is dispersed more widely in the community than the revenue generated in a few large enterprises. Medium enterprises bring about greater equality of income distribution. As most of the medium enterprises are either proprietary or partnership concerns, the relations between the workers and the employees are more harmonious in medium enterprises than in large enterprises.
Growth of Medium Scale Industries in India
There has been a phenomenal increase in the number of medium-scale industries in India. With the growth in large scale industries, the medium sector has witnessed development. The medium and ancillary industry acts as a supplementary for large-scale and small-scale industries. The large scale and small-scale industry are dependent on the medium scale industries for meeting their production and sales requirements.