Lucknow, Apr 8 (KNN) MSME sector accounts for almost 60 per cent of UP’s total industrial output. However, there has been a fall in investments in MSME sector since 2012-13 which may be attributed to macro-economic slowdown and a shift in focus from manufacturing to services sector which requires lower investment, according to a study.

The study also said that there is a need to involve industry players, academic institutes, field experts and others to assist sick MSMEs in reviving their businesses which would also lead to utilisation of the assets and capacity already created

During the 11th Five-Year Plan (2007-2012), Uttar Pradesh (UP) has managed to exceed its target by setting up over 1,800 additional micro, small and medium enterprises (MSMEs) and generating over two lakh additional jobs, noted a just-concluded study by apex industry body ASSOCHAM jointly with Thought Arbitrage Research Institute (TARI).

“The Uttar Pradesh (UP) government’s thrust upon development of MSMEs across the state has resulted in establishing over 1.66 lakh MSMEs with an investment of over Rs 13,000 crore and generating over 8.5 lakh employment opportunities during the 11th Five-Year Plan (2007-2012),” highlighted the study titled ‘MSME sector in Uttar Pradesh’.

“UP has made significant progress in promoting growth of MSMEs and has evidently been able to exceed targets set in the 11th Five-Year Plan (FYP) to generate 6.5 lakh employment opportunities by establishing 1.65 MSME units across the state,” said D.S. Rawat, Secretary General, ASSOCHAM while releasing the findings of the study along with Mr Kaushik Dutta, director, TARI at a press conference held here on Thursday.

“UP government is making significant efforts for providing conducive environment and policy support to enable MSME sector to achieve higher levels of production, exports and employment,” said Rawat.

Implementation of Infrastructure and Industrial Investment Policy-2012 by the state government led to establishment of more than 45,000 MSME units with an investment of over Rs 3,000 crore, thereby providing employment to about five lakh people across UP in 2013-14, highlighted the study.

However, there has been a fall in investments in MSME sector since 2012-13 which may be attributed to macro-economic slowdown and a shift in focus from manufacturing to services sector which requires lower investment.

Repairing and servicing industries account for over 1/4th share in key MSME industries in UP followed by miscellaneous manufacturing (15 per cent), food products (15 per cent), hosiery and garments (11 per cent), the study noted.

Similarly, repairing and servicing industries account for 21 per cent in terms of employment share in key MSME industries in UP followed by food products (14 per cent), miscellaneous manufacturing (14 per cent), hosiery and garments (11 per cent) and others.

Western UP accounts for over 50 per cent share in terms of region-wise composition of MSME units followed by eastern UP (28 per cent) and central region (!6 per cent) and a similar trend is also there in terms of region-wise composition of employment in MSMEs in the state, highlighted the ASSOCHAM-TARI study.

MSME sector accounts for almost 60 per cent of UP’s total industrial output, thereby playing a crucial role in providing large scale employment at lower capital cost, promoting industrialisation in rural and backward areas, reducing regional imbalance and assuring equitable distribution of national income and wealth.

Besides, MSME sector is the second largest employment generator (after agriculture) in UP, as it employs over 92 lakh people across the state. However, 90 per cent of these people are employed in unregistered MSMEs.

The industry body has also urged the state government to revive over 84,000 sick MSME units across UP as the sector forms the backbone of economic progress and development of UP which is India’s leading state with highest number of over 44 lakh enterprises in this sector, of which over 42 lakh units remain unregistered.

Shortage of working capital, lack of technological support, internal structural issues, heavy interest burden, obsolete plant and machinery, resource crunch, dearth of manpower and certain key reasons of MSMEs in UP.

The state government should involve industry players, academic institutes, field experts and others to assist sick MSMEs in reviving their businesses which would also lead to utilisation of the assets and capacity already created, suggested the study.