- Knowledge & News Network (KNN)
Return on capital better for Medium sized enterprises: RBI data
New Delhi, 20 Oct (KNN) In an important finding, RBI Bulletin (October 2021) has found that in MSMEs category the Return on Physical Capital (RoPC) increases with size of the firms.
The RoPC is an important metric to gauge value creation in manufacturing due to the predominant role of physical capital in production.
The aggregate RoPC of the Indian formal manufacturing sector is estimated at 19.5 per cent stands comparable to the returns observed in other developing countries.
“This study explores the variation in RoPC in the formal manufacturing sector across various firm characteristics such as age, location, size, type of ownership, capital intensity and type of activity using the firm level Annual Survey of Industries (ASI) data for the year 2017-18,” the communique adds.