An Evaluation of Performance of Micro, Small and Medium Enterprises in Chittoor District, Andhra Pradesh

Abstract

The micro, small and medium enterprises (MSMEs) provide productive employment and generate income to crores of people in the country, particularly in rural India. This subject has emerged as an important concern for governments and policy makers in the country. It is evident that the so called strategies to establish big size industries to cater to a variety of needs of the people of the country have failed. There was a realisation that the large scale, capital intensive, modern industrialisation strategies in the earlier period under different plans have failed to solve the pressing problem of unemployment and poverty. In view of this fact, MSMEs were viewed as an effective way to fostering balanced regional development, use of plenty of resources, etc. In this direction, Government of India has initiated many steps to promote small and cottage industries across several segments of society. It is said that until 2006, the categorisation and investment limit imposed was unfriendly to industrial units. Following this criticism, the policy makers felt the need to increase the investment limit and modify the categorisation of industries. Andhra Pradesh (A.P.) is known for its diversity in terms of geography, human and natural resources, and composition of industries. Rayalaseema is one of the most backward regions in terms of per capitia income, employment opportunities, pace of industrialisation and so on. Chittoor district is one of the four districts of the Rayalaseema region. In this paper, an earnest attempt is made to evaluate the overall performance of MSMEs in terms of number of units, capital employed to procure plant and machinery, total capital invested in aggregate assets and employment generated from the period of enactment of MSME Development Act, 2006. The study is divided into four sections. The first section is introductory in nature, while the second section deals with the general and industrial profile of Chittoor district. The third section covers the growth and development of MSMEs in Chittoor district in the recent past, and the fourth section presents the conclusions of the study.