Sickness in micro, small and medium enterprises (MSMES) in India

Abstract

This paper attempts to examine the growth of number of sick units and to highlight the reasons for sickness in MSME sector in India. For this purpose the necessary data required for the study have been collected from Fourth All India Census of MSME, Ministry of Micro, Small and Medium Enterprises, Government of India. The results of the study show that the number of sick units in MSME sector has declined from 1.77 lakh in 2001-02 to 0.90 lakh in 2010-11. The percentage of sick units in total MSMEs has also declined to 0.29% in 2010-11 from 1.68% in 2001-02. Lack of demand for the product and shortage of working capital are the main reasons for the sickness in MSMEs.