India is home to a large number of small entrepreneurs. The Micro, Small and Medium Enterprises (MSMEs) play a dominant role in the economic development of India not only by providing employment opportunities to the large section of society but also by making a significant contribution to India’s GDP and export. The major advantages of this sector are higher employment generation and income potential at low capital cost. The North Eastern Region (NER) of India is among the major backward regions of the country. The main reason for their uneven growth is their geographical location and distance from mainland. Further, factors like climatic conditions, poor infrastructure, political disturbances, local dominance and market unavailability have retarded the growth of industries in this region. The MSME sector provides a new hope not only to the unemployed population of the region but also in bringing overall balanced growth. This paper presents a comparative picture of MSME development in India and its NER. Further, special emphasis has been laid on the growth of MSME sector in different states of NER, their composition, and reasons for their backwardness and lower growth.

Worldwide Micro, Small and Medium Enterprises (MSMEs) are playing a pivotal role in economic development. Its distinctive feature of equitable development and easy access to resources has increased the scope and coverage of small entrepreneurs. Different countries hold different perception and criteria in identifying or differentiating the pattern of enterprises. The SMEs are defined more meaningfully by their functional and behavioral attributes. Sometimes, the usual difference in SME classification made by different countries varies based upon capital investment and labor structure. The European Union has defined micro entities as the companies holding up to 10 employees, whereas in Australia, it consists of 1 to 2 employees.

India is home to a large number of small entrepreneurs. The lack of access to resources and non-availability of capital and employment opportunities force the vast section of population to the next best opportunity of availing either new business or to carry on the traditional family business. In rural areas, almost every household is engaged in certain entrepreneurial activities apart from their regular income-generating activity. The MSMEs play a dominant role in the economic development of India not only by providing employment opportunities to a large section of society but also by making a significant contribution to India’s GDP and export. The major advantages of this sector are higher employment generation and income potential at low capital cost. The MSME sector through its dynamic structure provides a sound base not only at macro level but also among individual entrepreneurs through progressive participation and distinctive contribution. As per the Annual Report 2011-12 (Ministry of Micro, Small and Medium Enterprises), the sector through its vibrant structure holds more than 261 lakh enterprises, providing employment to about 595 lakh people and contributing about 45% of the manufacturing output and 40% of total exports of the country.

Entrepreneurship Development Journal, Micro, Small and Medium Enterprises (MSMEs), North Eastern Council (NEC), Micro, Small and Medium Enterprises, Performance, North Eastern Region (NER), Prospects.