THE MOUS AND AGREEMENTS

The MoU or memorandum of understanding is primarily an agreement between two parties or among more parties. The MoU states the understanding between the parties as it gives an overview of the areas that the agreement focuses on. The MoU is not enforceable in the eye of the law, and the parties entering the agreement are not legally bound to abide by the outlines of the agreement. A MoU is created by the parties to make agreements without the intention to create legal bonds. Three are certain factors associated with MoU, and it plays a significant role in the small-scale industry, MSME sector, and UNDP organizations. 

Overview of the concept of MoUs and Agreements

It needs to be considered that the MoU has to be standard as it states the expectation of the parties that are involved in the agreement. It is not legally binding, however, there is a proper method of creating a MoU. It is a process by which the parties participate in the negotiation. Since it is not legally binding, parties can easily exit the agreement. It needs to be understood that the MoU is enforceable under the court of law only when it conforms to the Indian Contract Act, 1872. To make it valid, there has to be a legally abiding relationship among the parties participating in the agreement. 

The small sector industry is an industry that produces, manufactures, and provides services using small machines and very little manpower. It is a sector that plays a very important role in generating employment opportunities in the country. It helps to boost the economy of the country by making way for sources of income for the unemployed youth. MoU and agreements play a significant role in small sector industries as the merging of companies may enhance the productivity of the industry. The small sector industry has many characteristics as it provides a lot of opportunities to improve the economic stability of the country. The management control through the MoU helps the owners or the parties to manage the daily activities of the organizations. The small sector industry can be a representative of the Make in India initiative, as it focuses on both manufacturing and selling the goods in India. It helps in the growth and development of the country’s indigenous industry and contributes largely to India’s total exports. The small sector industry aims at the development of underdeveloped or rural areas. Its objective is to generate an equal distribution of wealth and to generate employment opportunities in the less developed areas of the country. The small sector industry focuses on self-reliance and it aims at producing quality products at cheaper costs.s

Role of MoUs and Agreements in business sectors and UNDP

The micro small and medium enterprises or the MSME sector help in the socio-economic development of the country. It plays a significant role in contributing to the country’s GDP. The MSME sector focuses on the welfare of the indigenous workers and the artisans by providing them employment opportunities. It provides loans and other facilities or benefits to the rural artisans, and there is much funding support given by the banks to promote the local and indigenous industries. The products produced in the MSME sector dominate the export market. It also provides certification and testing facilities to encourage new ideas of innovation.

The United Nations Development Program Organization UNDP organization is an international organization that works across 170 countries and territories to reduce worldwide poverty and eradicate the inequalities of wealth. In addition to this, the UNDP organization provides funds to the countries so that they can develop their leadership skills. It also helps the countries to formulate policies according to the requirements of the particular country. 

Conclusion

There are many benefits associated with MoU as it states the objectives of the parties that enter into an agreement. It underlines the expectation of all the parties so that disagreements do not arise in the future. According to sources, about 40% of the total output concerning production is contributed by the small sector industry. The MSME sector encourages entrepreneurship and provides specialized training to the artisans for the up-gradation of their skills.