MSMEs - the largest employers in the country face a threat from Chinese Imports
Updated: Nov 04, 2015 03:44:30pm
New Delhi, Nov 4 (KNN) Micro, Small and Medium Enterprises (MSME) are by far the biggest employers in the country today. According to the latest annual report (2014-15) of the Ministry of Micro, Small and Medium Enterprises, there are an estimated 4.9 crore MSMEs employing more than 11 crore people.
MSMEs – Number and Employment
According to the ministry’s annual report, the number of MSMEs and the employment generated by them have been increasing consistently. The number of MSMEs has increased by about 20 per cent to 4.88 crore in 2013-14 from 4.11 crore in 2009-10. The employment generated by the MSMEs has also grown on similar lines to 11.14 crore in 2013-14 from 9.22 crore in 2009-10, representing a 21 per cent increase.
The average number of employees per establishment hasn’t changed much in the five years from 2009-10 to 2013-14. It has remained more or less constant, at around 2.3 employees per establishment. While this may not very high, a large number of these enterprises are one man establishments.
Spread in the States
As expected, the top 10 in terms of the number of MSMEs is dominated by the larger states with Uttar Pradesh at the top with 44.1 lakh MSMEs. West Bengal has about 36.7 lakh followed by Tamil Nadu (33.1 lakh), Maharashtra (30.7 lakh), Andhra Pradesh (25.9 lakh) in the top five. The other states in the top 10 are Kerala, Gujarat, Karnataka, Madhya Pradesh and Rajasthan. The only notable exception in this list is Bihar.
According to the fourth All India Census of MSMEs, more than 92 per cent of the enterprises are in the unregistered sector and these account for more than 81 per cent of the employment. Less than 8 per cent of the enterprises are in the registered sector accounting for more than 18 per cent of the employment.
Share in GDP and Exports
The contribution of MSMEs to both the GDP and Exports is significant. According to the Ministry of MSME, the estimated contribution of the MSME sector to the GDP has been consistently more than 35 per cent rom 2009-10 to 2012-13. While it was 36 per cent in 2009-10, it has grown to 37.5 per cent in 2012-13.
Based on the export data maintained by Director General of Commercial Intelligence and Statistics, Ministry of Commerce, the share of MSMEs in India’s total export has been more than 40 per cent in the last 3 years. From 43 per cent in 2012-13, it has grown to 44.7 per cent in 2014-15. MSMEs contribute nearly half of India’s exports.
The Chinese Import Threat
India’s trade deficit with China has been on the rise on account of decreasing exports and increasing imports. The trade deficit in 2014-15 has gone up to 48474 million USD. Indian MSMEs also face tough competition from cheap Chinese products as is evident in high growth of India’s imports from China.
As per information compiled by Director General of Commercial Intelligence and Statistics, about 12 major product groups, largely manufactured by MSMEs in India, imports from China grew at a higher rate than their respective imports from all Countries combined during 2011-12 to 2014-15. These 12 product groups accounted for 74 per cent of India’s total imports from China in 2014-15 and a significant proportion of Indian MSMEs seem to be adversely affected from Chinese imports.
These 12 product groups pertain to Electrical and Electronics, Mechanical and Metallurgical products on the one hand and Chemical, Glass and Ceramics based products on the other.
The government on its part has been imposing anti-dumping duties, permitted under the WTO, for restricting imports when such imports have been established as unfairly affecting the market for goods and services produced by Indian industries. As per the data available with Directorate General of Anti-Dumping and Allied Duties (DGAD), about 1/4th (25 per cent) of all the cases initiated since 1994 are against China. Till June 2014, a total of 166 such cases of anti-dumping duty have been initiated against China and duty has been imposed in 134 such cases.
With regards to taking any strict action, India seems to be bound by WTO framework. While India has initiated certain actions like mandating BIS certification for certain products and prohibiting import of mobiles without an IMEI number etc, a lot more needs to be done if this threat has to be countered. There has to be greater focus on export oriented sectors.
Courtesy: www.factly.in
*The writer has been working on issues related to Right to Information (RTI) for a decade. He is a Data/Information enthusiast and passionate about Governance/Policy issues. (KNN Bureau)
MSMEs – Number and Employment
According to the ministry’s annual report, the number of MSMEs and the employment generated by them have been increasing consistently. The number of MSMEs has increased by about 20 per cent to 4.88 crore in 2013-14 from 4.11 crore in 2009-10. The employment generated by the MSMEs has also grown on similar lines to 11.14 crore in 2013-14 from 9.22 crore in 2009-10, representing a 21 per cent increase.
The average number of employees per establishment hasn’t changed much in the five years from 2009-10 to 2013-14. It has remained more or less constant, at around 2.3 employees per establishment. While this may not very high, a large number of these enterprises are one man establishments.
Spread in the States
As expected, the top 10 in terms of the number of MSMEs is dominated by the larger states with Uttar Pradesh at the top with 44.1 lakh MSMEs. West Bengal has about 36.7 lakh followed by Tamil Nadu (33.1 lakh), Maharashtra (30.7 lakh), Andhra Pradesh (25.9 lakh) in the top five. The other states in the top 10 are Kerala, Gujarat, Karnataka, Madhya Pradesh and Rajasthan. The only notable exception in this list is Bihar.
According to the fourth All India Census of MSMEs, more than 92 per cent of the enterprises are in the unregistered sector and these account for more than 81 per cent of the employment. Less than 8 per cent of the enterprises are in the registered sector accounting for more than 18 per cent of the employment.
Share in GDP and Exports
The contribution of MSMEs to both the GDP and Exports is significant. According to the Ministry of MSME, the estimated contribution of the MSME sector to the GDP has been consistently more than 35 per cent rom 2009-10 to 2012-13. While it was 36 per cent in 2009-10, it has grown to 37.5 per cent in 2012-13.
Based on the export data maintained by Director General of Commercial Intelligence and Statistics, Ministry of Commerce, the share of MSMEs in India’s total export has been more than 40 per cent in the last 3 years. From 43 per cent in 2012-13, it has grown to 44.7 per cent in 2014-15. MSMEs contribute nearly half of India’s exports.
The Chinese Import Threat
India’s trade deficit with China has been on the rise on account of decreasing exports and increasing imports. The trade deficit in 2014-15 has gone up to 48474 million USD. Indian MSMEs also face tough competition from cheap Chinese products as is evident in high growth of India’s imports from China.
As per information compiled by Director General of Commercial Intelligence and Statistics, about 12 major product groups, largely manufactured by MSMEs in India, imports from China grew at a higher rate than their respective imports from all Countries combined during 2011-12 to 2014-15. These 12 product groups accounted for 74 per cent of India’s total imports from China in 2014-15 and a significant proportion of Indian MSMEs seem to be adversely affected from Chinese imports.
These 12 product groups pertain to Electrical and Electronics, Mechanical and Metallurgical products on the one hand and Chemical, Glass and Ceramics based products on the other.
The government on its part has been imposing anti-dumping duties, permitted under the WTO, for restricting imports when such imports have been established as unfairly affecting the market for goods and services produced by Indian industries. As per the data available with Directorate General of Anti-Dumping and Allied Duties (DGAD), about 1/4th (25 per cent) of all the cases initiated since 1994 are against China. Till June 2014, a total of 166 such cases of anti-dumping duty have been initiated against China and duty has been imposed in 134 such cases.
With regards to taking any strict action, India seems to be bound by WTO framework. While India has initiated certain actions like mandating BIS certification for certain products and prohibiting import of mobiles without an IMEI number etc, a lot more needs to be done if this threat has to be countered. There has to be greater focus on export oriented sectors.
Courtesy: www.factly.in
*The writer has been working on issues related to Right to Information (RTI) for a decade. He is a Data/Information enthusiast and passionate about Governance/Policy issues. (KNN Bureau)
Loading...
![](\"https://2nafqn3o0l6kwfofi3ydj9li-wpengine.netdna-ssl.com/wp-content/uploads/2015/10/micro-small-and-medium-enterprises-chinese-imports-threat_number-of-msme-employment.jpg\"){kind=link}
![](\"https://2nafqn3o0l6kwfofi3ydj9li-wpengine.netdna-ssl.com/wp-content/uploads/2015/10/micro-small-and-medium-enterprises-chinese-imports-threat_average-number-of-employees-enterprise.jpg\"){kind=link}
![](\"https://2nafqn3o0l6kwfofi3ydj9li-wpengine.netdna-ssl.com/wp-content/uploads/2015/10/micro-small-and-medium-enterprises-chinese-imports-threat_top-10-states-largest-number-msme.jpg\"){kind=link}
![](\"https://2nafqn3o0l6kwfofi3ydj9li-wpengine.netdna-ssl.com/wp-content/uploads/2015/10/micro-small-and-medium-enterprises-chinese-imports-threat_share-in-gdp-and-exports.jpg\"){kind=link}
![](\"https://2nafqn3o0l6kwfofi3ydj9li-wpengine.netdna-ssl.com/wp-content/uploads/2015/10/micro-small-and-medium-enterprises-chinese-imports-threat_share-of-msme-in-indias-total-exports.jpg\"){kind=link}
![](\"https://2nafqn3o0l6kwfofi3ydj9li-wpengine.netdna-ssl.com/wp-content/uploads/2015/10/micro-small-and-medium-enterprises-chinese-imports-threat_indias-trade-deficit-with-china.jpg\"){kind=link}