Mobilizing Micro Enterprises for Inclusive and Sustainable Growth in Jharkhand, India: A Composite Index Approach

Abstract

Micro enterprises are central to employment, income generation and local economic resilience, but their performance differs across Indian states because of variations in infrastructure, institutional support and entrepreneurial conditions. This study evaluates the performance of micro enterprises in Jharkhand relative to other major Indian states using a Composite Growth Index (CGI) covering four dimensions: growth and performance, inclusiveness, structural composition, and entrepreneurial dynamism. Secondary data for 2020–2022 were normalised using the min–max technique, and Principal Component Analysis was applied to derive factor loadings and weights across 18 Indian states. Jharkhand records a CGI of 0.21, one of the lowest values in the comparison. Its Growth Index (0.06) and Structural Index (0.04) indicate limited enterprise expansion and narrow structural diversification, while its Inclusiveness Index (0.43) and Entrepreneurship Index (0.37) suggest comparatively stronger participation by women and socially disadvantaged groups and emerging entrepreneurial activity. The findings indicate that infrastructure gaps, limited access to finance, weak market linkages and skill constraints continue to restrict the expansion of micro enterprises in the state. The analysis supports the need for stronger cluster-based development, rural incubation, simplified credit access, skill and digital-literacy programmes, improved market linkages, technology adoption and better coordination in the implementation of MSME support measures. Together, these measures may strengthen the contribution of micro enterprises to inclusive and sustainable growth in Jharkhand.