Knowledge-based MSMEs in service sector grow faster

CRISIL has analysed the performance of 726 micro, small, and medium enterprises (MSMEs) in the service sector, which were rated on the basis of their financials for 2013-14 (financial year April 1 to March 31). The study revealed that MSMEs in knowledge-based segments - that is, consulting, education, health care, and information and communication technologies (ICT) - registered higher growth, as compared to other segments in the same sector, such as construction, logistics, and printing.

The average income of knowledge-based MSMEs increased to Rs 13.97 crore in 2013-14, from Rs 9.10 crore in 2011-12, at a compound annual growth rate (CAGR) of 21 per cent. In comparison, the average income for the other service segments increased to Rs 23.84 crore in 2013-14, from Rs 18.37 crore in 2011-12, at a CAGR of 14 per cent.

 

  Of the knowledge-based MSMEs, those in health care registered an impressive CAGR in average income of 41 per cent, supported by a boost in the number of surgeries undertaken and patients covered by state-funded health care insurance schemes.

That of MSMEs in ICT grew by 25 per cent, followed by those in consulting at 20 per cent, while those in education grew at 19 per cent. Based on the study, CRISIL expects that with improvement in overall economic prospects, knowledge-based MSMEs should continue to perform well.

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Note: CRISIL has rated over 50,000 MSMEs in India. This fortnightly tracker presents to our readers insights on MSMEs, a key element of the Indian economy.