Disparities in Rural-Urban Participation and Gender Inequality in India's MSME Sector: An In-Depth Analysis

Abstract

The study explores the distribution and characteristics of Micro, Small, and Medium Enterprises (MSMEs) across urban and rural regions in India. It reveals a nearly equal division between urban (49%) and rural (51%) enterprises, with rural areas slightly surpassing urban areas in overall enterprise count. The trade sector, comprising 36% of total MSMEs, shows a comparable presence in both areas, while the Other Services sector (33% of MSMEs) also reflects a similar distribution. However, a notable disparity emerges in the progression of micro enterprises into small and medium enterprises, with urban areas seeing a significantly higher transition rate. Micro enterprises dominate rural areas, while small and medium enterprises are more concentrated in urban regions. The study also highlights the low participation of Female in MSMEs, with only 20.37% overall, and even lower representation in small (5.26%) and medium (2.67%) enterprises. Employment data indicates that MSMEs provide jobs for 1109.89 lakh people, with urban areas employing 55% of the workforce. Despite this, Female's employment in MSMEs remains low, constituting just 24% of the total workforce. The research underscores the need for targeted efforts to promote the growth of enterprises in rural areas and enhance Female's participation in the MSME sector.