Challenges of Organised and Unorganised Micro and Small Manufacturing Enterprises: Evidence from Ludhiana

Abstract

This study examines and compares the challenges faced by organised and unorganised micro and small manufacturing enterprises (MSEs) in Ludhiana district, Punjab. Primary data were collected during 2021–22 through a pre-tested semi-structured questionnaire administered through personal interviews with entrepreneurs. The sample comprised 400 manufacturing MSEs, with 200 units from the organised sector and 200 from the unorganised sector, selected using stratified random sampling. The study evaluates economic and infrastructural, socio-demographic, political and legal, and technological challenges using Garrett’s ranking method. Economic and infrastructural challenges received the highest mean score in both sectors: 53.55 among organised MSEs and 51.52 among unorganised MSEs. For organised units, political and legal challenges ranked second, followed by technological and socio-demographic challenges. For unorganised units, technological challenges ranked second, followed by political and legal and socio-demographic challenges. At the problem level, interrupted electricity supply was the leading economic and infrastructural issue for organised enterprises, whereas poor transport connectivity was the leading issue for unorganised enterprises. Lack of skilled labour emerged as the most prominent technological problem in both groups. The findings also identify sector-specific concerns relating to gender, education, regulatory compliance, scheme awareness, finance, delayed payments and digitalisation. The study indicates that policy support should address infrastructure, finance, skills, technology, regulatory procedures and access to government schemes in ways that reflect the differing constraints of organised and unorganised manufacturing MSEs.