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    Role of SME

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    Adr HR
    Small and medium enterprises (SMEs) are an important part of India's economy. They contribute significantly to production, exports, employment, and foreign exchange. The Indian government recognizes the importance of SMEs and has various organizations that support their development through funding, infrastructure, technology, and training assistance. SMEs face challenges securing adequate financing and dealing with infrastructure issues, but the growing Indian economy and government support provide opportunities for SME growth and expansion.

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    Role of SME

    Uploaded by

    Adr HR
    229 views7 pages
    Small and medium enterprises (SMEs) are an important part of India's economy. They contribute significantly to production, exports, employment, and foreign exchange. The Indian government recognizes the importance of SMEs and has various organizations that support their development through funding, infrastructure, technology, and training assistance. SMEs face challenges securing adequate financing and dealing with infrastructure issues, but the growing Indian economy and government support provide opportunities for SME growth and expansion.

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    Small and medium enterprises (SMEs) are an important part of India's economy. They contribute significantly to production, exports, employment, and foreign exchange. The Indian government recognizes the importance of SMEs and has various organizations that support their development through funding, infrastructure, technology, and training assistance. SMEs face challenges securing adequate financing and dealing with infrastructure issues, but the growing Indian economy and government support provide opportunities for SME growth and expansion.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    229 views7 pages

    Role of SME

    Uploaded by

    Adr HR
    Small and medium enterprises (SMEs) are an important part of India's economy. They contribute significantly to production, exports, employment, and foreign exchange. The Indian government recognizes the importance of SMEs and has various organizations that support their development through funding, infrastructure, technology, and training assistance. SMEs face challenges securing adequate financing and dealing with infrastructure issues, but the growing Indian economy and government support provide opportunities for SME growth and expansion.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 7

    Role of SMEs in Economic Growth of India

    Introduction
    Small and medium enterprises are the backbone of industrial development.
    It is very important for both developed and developing country Small and medium enterprises always
    represented the model of economic development, which emphasized high contribution to domestic
    production, significant export earnings, low investment requirements, employment generation,
    effective contribution to foreign exchange earning of the nation with low import-intensive operations.
    The development of this sector came about primarily due to the vision of our late Prime Minister
    Jawaharlal Nehru who sought to develop core industry and have a supporting sector in the form of
    small scale enterprises.
    SMEs sector has emerged as a dynamic and vibrant sector of the economy. The Indian economy is
    expected to grow by over 8 per cent per annum until 2020 and can become the second largest in the
    world, ahead of the United States, by 2050, and the third largest after China and the United States by
    2032.
    Definition of MSME
    According to new THE MICRO, SMALL AND MEDIUM ENTERPRISES DEVELOPMENT ACT, 2006 the
    MSME Definitions are as follows: In the case of the enterprises engaged in the manufacture or
    production of goods pertaining to any industry specified in the first schedule to the Industries
    (Development and Regulation) Act, 1951, as

    Some of the important organizations that are associated with SMEs in India are: Small Industries
    Development Organization (SIDO), National Small Industries Corporation Ltd. (NSIC), Small Industries
    Development Bank of India (SIDBI), Confederation of Indian Industry (CII), Laghu Udyog Bharti (LUB),
    Federation of Indian Chamber of Commerce and Industry (FICCI), Associated Chamber of Commerce and
    Industry of India (ASSOCHAM), National Institute of Small-Industry Extension Training (NISIET), World
    Association for Small and Medium Enterprises (WASME), Small Scale Industries Board (SSIB), PHD
    Chamber of Commerce and Industry (PHDCCI), Federation of Indian Exporters Organization (FIEO),
    Federation of Associations of Small Industries of India (FASII)

    What they actually are?
    The commonly used criteria at the international level to define SMEs are the number of employees,
    total net assets, sales and investment level.
    The European Union makes a general distinction between self-employment, micro,small and medium
    sized businesses based on the following criteria:
    And the criteria is-
    0 Self-employed
    2-9 Micro business
    10-49 Small business
    50-249 Medium-size business

    Criteria in India-
    Micro enterprise-investment does not exceed 25 lakh rupees.
    Medium enterprise- more than five crores but not upto ten crores.
    Small enterprise- more than 25 lakhs rupees but doe not exceed 5 crores.
    In case of services-
    a micro enterprise- not upto 10 lakh rupees.
    a small enterprise- more than 10 lakh but not upto 2 crore rupees.
    a medium enterprise- more than 2 crores but not upto 5 crores.

    Role of SMEs in Indian Economy
    In order understand the impact of SMEs on the Indian economy; one must study the trend and pattern
    that have been prevalent in the preceding years. It gives us the vivid picture of what follows next.
    Following graphics help us to understand the present scenario and their contributions of MSMEs in
    India.
    Limitations of the study
    The time period given for study was very limited

    The respondents of the questionnaire were very busy and could not afford more time to
    answer. The average time to response was 5-6 minutes only.

    Study restricted through social sites .




    MSMEs share by sector


    Growth Performance of SMEs or MSMEs in India

    Employment in MSME Sector




    Sector wise MSME

    Activity wise MSME


    The opportunities of growth in the SMEs sector
    Less Capital Intensive
    Extensive Promotion & Support by Government
    Reservation for Exclusive Manufacture by small scale sector
    Project Profiles
    Funding - Finance & Subsidies
    Machinery Procurement
    Raw Material Procurement
    Manpower Training
    Technical & Managerial skills
    Tooling & Testing support
    Reservation for Exclusive Purchase by Government
    Export Promotion
    Growth in demand in the domestic market size due to overall economic growth
    Increasing Export Potential for Indian products
    Factors affecting SMEs
    MSMEs in India face several problems such as-
    1. lack of availability of adequate and timely credit
    2. High cost of credit
    3. inadequate infrastructure facilities like power, water and roads, and lack of access to modern
    technology.
    4. limited access to equity capital
    5. problems in supply to government departments and agencies
    6. procurement of raw materials at a competitive price
    7. Issues of storage
    8. Designing, packaging and product display
    Conclusion
    In India SMEs has achieved steady growth over the last couple of years. The role of SMEs in the
    industrial sector is growing rapidly and they have become a thrust area for future growth. The Indian
    market is growing and the Indian industry is making rapid progress in various Industries like
    manufacturing, food processing, textile and garments, retail, precision engineering, information
    technology, pharmaceuticals, agro and service sectors. Under the changing economic scenario the SMEs
    have both the opportunities and challenges before them.


    References:
    o http://igovernment.in/site/india-to-develop-1150-sme-clusters
    o www.oecd.org/dataoecd/37/47/34026603.pdf
    o http://ec.europa.eu
    o http://www.businessworld.in/bw/
    2009_08_01_The_SME_Whitebook_20092010.html
    o http://blog.optionsindia.com/2008/06/sme-sector-in-india-and-random-
    thoughts.htm

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