Performance of MSMEs at the Extent of External Shocks

Abstract

The nation's inclusive industrial development is significantly supported by the micro, small, and medium-sized enterprises (MSMEs), which serve as a complement to the major industries. In addition, the industry has several obstacles and difficulties, such as inadequate funding and credit, outdated technology, poor and inadequate infrastructure, a shortage of qualified labour, and many more. Due to their size and kind of business, MSMEs face several issues, making them comparatively more vulnerable to certain economic shocks. This study made an effort to examine how the MSME sector performed under external shocks like India's demonetisation of currency by looking at how employment, investment, and output levels were affected. It was noted that while some states managed to boost employment and investment and were resistant to shocks like demonetization, other states were more severely hit and were unable to withstand the adverse effects of demonetisation on their economic operations. One could conclude that the country's states' economies were affected unevenly by demonetisation.