Article Nisarg
SME stands for Small and Midsize enterprises. The definition defers from country to country. A business that maintains its revenue or employees below a certain standard is called an SME. The European definition for SMEs is “The businesses which have less than 250 employees and the annual revenue is less than 50 million euro (or annual balance sheet total less than 43 million euro) are called SMEs.”
India has defined SMEs under Micro, Small and Medium Enterprises Development (MSMED) Act, 2006. It says for a small sized enterprise the investment in plant and machinery should be between 25 lakh and 5 crore and for a medium sized enterprise it should be minimum 5 crore and should not exceed 10 crore. This definition is applicable to the enterprises which are in manufacturing sector. For the enterprises which render services, if the investment is between 10 lakh to 2 crore they are called small sized and if the investment is between 2 crore to 5 crore they are called medium sized enterprises.
The SME sector has been of prime importance for India as it involves less capital investment and is highly labour intensive. It boasts of being second highest in providing employment and contributes to our goal of inclusive growth and equal distribution of resources. SMEs prompts private ownership, instils entrepreneur skills in the youth and establishes powerful market supply chain. The report published by Ministry of Small and Midsize Enterprise says around 45% of the total output and 40% of the total export of the country comes from SMEs by employing 106.1 million people over 26 million units in 2013. It contributes around 22% to the nation’s GDP.
Fig 1
www. msme.gov.in
Now instead of discussing the past the immense potential ahead prompts me to throw some more lights on future of SMEs and how India can fulfil its “Make in India” dream through it. Now in the world of cut throat competition it is very
India has defined SMEs under Micro, Small and Medium Enterprises Development (MSMED) Act, 2006. It says for a small sized enterprise the investment in plant and machinery should be between 25 lakh and 5 crore and for a medium sized enterprise it should be minimum 5 crore and should not exceed 10 crore. This definition is applicable to the enterprises which are in manufacturing sector. For the enterprises which render services, if the investment is between 10 lakh to 2 crore they are called small sized and if the investment is between 2 crore to 5 crore they are called medium sized enterprises.
The SME sector has been of prime importance for India as it involves less capital investment and is highly labour intensive. It boasts of being second highest in providing employment and contributes to our goal of inclusive growth and equal distribution of resources. SMEs prompts private ownership, instils entrepreneur skills in the youth and establishes powerful market supply chain. The report published by Ministry of Small and Midsize Enterprise says around 45% of the total output and 40% of the total export of the country comes from SMEs by employing 106.1 million people over 26 million units in 2013. It contributes around 22% to the nation’s GDP.
Fig 1
www. msme.gov.in
Now instead of discussing the past the immense potential ahead prompts me to throw some more lights on future of SMEs and how India can fulfil its “Make in India” dream through it. Now in the world of cut throat competition it is very
References: en.wikipedia.org/wiki/Small_and_medium-sized_enterprises http://www.investopedia.com/terms/s/smallandmidsizeenterprises.asp msme.gov.in www.google.com www.facebook.com