CLUSTER APPROACH FOR DEVELOPMENT OF MSME SECTOR IN INDIA

Micro, Small and Medium Enterprises (MSMEs) in India have been evolved considerably since independence of india. Merely from being referred as the Small Scale Industries (SSI) sector in the 60s and 70s, the MSME sector has progressed in large scale and in the scope of business activities over the years. Today, MSMEs are present throughout the sectors (manufacturing, trade and services) in India. Thereby constituting a very formidable component of the country?s outstanding economic growth. The key achievement of MSMEs over time has been their talent in utilizing available domestic resources to deliver quality products and services, these firms have made their presence felt across India?s key sectors as well as in prominent export markets. MSMEs have also made contribution on a range of issues, from industrial progress to entrepreneurship and from job creation to economic empowerment. It can be felt by the fact that around 50.0 per cent of MSMEs in India are owned by underprivileged groups. Since sector has low capital structure, coupled with high labour absorbing power, the sector has played a noteworthy role in achieving rural industrialization as well. The MSME sector remains a key driving force for India?s complete transition from an agrarian economy to an industrialized one. Hence, MSMEs have been awarded a host of incentives by governments across India. A number of other organizations in the private and non-profit domain have also been aiding MSMEs to remain competitive in a more globalised economic order. About MSME it is said it is more scattered and heterogeneous sector. So in order to grow and develop the industry in the sector the cluster approach has taken the birth. Government banks financial institutions are promoting developing encouraging the systematic approach of developing the concept of cluster. The clusters have lot potential. The approach can help for development of MSME as well as industrialization and development of economy.