Topic – Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment.
2) High Growth Firms have a beneficial spillover effect on MSMEs. Analyze in the context of Indian economy.(250 words)
Directive word
analyze-here we have to examine methodically the structure or nature of the topic by separating it into component parts, and present them as a whole in a summary.
Key demand of the question.
The question wants us to write in detail about the importance of HGFs in India and their relationship with MSMEs; how the latter benefit from the former; and factors affect this relationship.
Structure of the answer
Introduction- write a few introductory lines about the HGFs. E.g The OECD defines high-growth firms (HGFs) as those that employ more than 10 workers, with employment growing at an average annual rate of 20% or more over at least three consecutive years
Body-
- Discuss the importance of HGFs for an economy.. E.g HGFs affect upstream and downstream enterprises positively i.e when small, informal enterprises and large, formal enterprises are able to integrate effectively in supply chains, the barriers that the former face in achieving high productivity growth are lowered.
- Discuss the inadequacies of such relationship vis a vis India. E.g Given their smaller balance sheets and less scope for accessing credit, micro, small and medium enterprises (MSMEs) depend to a large extent on timely cash payments from the large companies they supply to in order to function effectively. It often doesn’t work out this way. Given their poorer bargaining power and the costs of using the legislation for tackling delayed payments—the MSME Development Act, 2006—micro and small enterprises frequently face inordinate delays in receiving payments. And goods and services tax kinks related to input tax credit are further complicating the picture etc.
Conclusion– based on your discussion, form a fair and a balanced conclusion on the given issue.
