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3:16 pm - Monday January 21, 9230

UP second in MSME registration growth: ASSOCHAM study

Agencies, Lucknow

Uttar Pradesh is second only to Maharashtra in terms of growth percentage in registration of micro, small and medium enterprises (MSMEs), according to the findings of a study released by Associated Chambers of Commerce and Industry on Friday.

The study, titled ‘Manufacturing Excellence and Emergence in India: The State-level Analysis’, “UP also ranked second after Maharashtra among 18 states in terms of growth in entrepreneur memorandum (EM) part-II filed by micro, small and medium enterprises (MSMEs) at district industrial centres in FY15 over FY13,” the study noted.

Maharashtra recorded highest growth rate of over 129 per cent in terms of registration of micro, small and medium enterprises under entrepreneur memorandum (EM) part-II, which grew from 16,136 in 2013 to 36,992 in 2015.

Uttar Pradesh ranked second with about 69 per cent growth as the number of MSME registrations grew from 30,933 in fiscal year 2013 to over 52,200 in 2015.

The state also commands third highest share of over 12 per cent in terms of EM-II filed by MSMEs across India, while Tamil Nadu (33.6 per cent share), Gujarat (15.1 per cent share) were ahead.

Uttar Pradesh notched up another impressive performance and ranked sixth in road density and seventh in rail density in 2015. The state recorded highest ratio of road and rail density at 77.67 and 16.9, respectively, in terms of manufacturing excellence and emergence in mainstream states across India.

The state also performed decently well in parameters like change in efficiency, total factor productivity, fixed capital income ratio and growth in manufacturing gross value addition (GVA).

The study, however, pointed out that UP needed to work upon improving its performance in parameters like employee cost, capacity utilisation, returns on capital, operational ratio, value addition, interest cost and input cost.

Overall, UP is ranked 6th and 7th in terms of manufacturing excellence and emergence across top states in India.

The ASSOCHAM Economic Research Bureau (AERB) had considered various parameters like number of factories, output value, working capital, net fixed capital formation, fixed capital, finished goods, capital invested, total inputs and others to ascertain the states’ performance in terms of manufacturing sector.

Highlighting the methodology, the study stated that all states were divided into three categories according to geographical conditions — north-eastern, Himalayan and mainstream states.

The mainstream states were further divided into two sub-categories, namely, excellence and emergence. The data was taken for each state from sources like Annual Survey of Industries, Ministry of Statistics and Programme Implementation, Government of India website for a five-year period between FY10 and FY15.

The study also highlighted various challenges being faced by India’s manufacturing sector – competitive cost and technology being offered by countries like Bangladesh, China, Indonesia, South Korea, Singapore and Taiwan.

While development process in other countries follows a transition from agriculture to manufacturing and then towards services sector, India’s growth has been services sector-led as such there have always been concerns about sustainability of such a growth, the study noted.

The ASSOCHAM study also stressed upon the importance of increasing share of manufacturing sector in India’s gross domestic product (GDP) to absorb a young workforce as bulk of population relies on agriculture for employment.

“The Union Government must address issues relating to poor product quality, infrastructural bottlenecks and inadequate efforts at research and development from a holistic macro perspective as they have collectively taken a toll on India’s manufacturing competitiveness,” said ASSOCHAM secretary-general D S Rawat, while releasing the findings of the study.

“Considering that a majority of investment projects in the manufacturing sector are stuck in different stages of implementation, we at ASSOCHAM have time and again suggested to the Union Government to develop a strong plan to prioritise speeding-up the process by creating a target-oriented roadmap,” he said.

“At the same time, private investors must also be held accountable and be penalised if projects get delayed or stuck due to improper planning, change of ownership, lack of finance, absence of co-ordination with contractors and other related issues,” he added.

Posted in: Business

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