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8/3/2019 Role of Smes & Msmes in Indian Economy
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ROLE OF SMES & MSMES IN INDIAN
ECONOMY
Presented by Group 8
Amita Malhotra
Devina Shingal
Dinesh Bhatia
Eklavya Verma
Esha MalhotraGuneet Saurabh
Hari Siddharth
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SNAPSHOT
Definitions
Some Facts
Objectives
Role of SMEs Economic Indicators
Challenges Faced
What could be done
Opportunities Importance of SMEs
Conclusion
References
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DEFINITIONS
MANUFACTURING ENTERPRISE
A small enterprise is an enterprise where the
investment in plant and machinery [original
cost excluding land and building] is more than
Rs.25 lakh but does not exceed Rs.5 crores.
A medium enterprise is an enterprise where
the investment in plant and machinery [original
cost excluding land and building] is more than
Rs.5 crore but does not exceed Rs.10 crore.
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DEFINITIONS
SERVICE ENTERPRISE
A small enterprise is an enterprise where the
investment in equipment is more than Rs.10
lakh but does not exceed Rs.2 crore.
A medium enterprise is an enterprise where
the investment in equipment is more than Rs.2
crore but does not exceed Rs.5 crore.
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SOME FACTS
Small and Medium Enterprises contributes
45% of the industrial output
40% of exports 42 million in employment
Create one million jobs every year
Produce more than 8000 quality products forthe Indian and international markets
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OBJECTIVES
Creating permanent and immediate employment.
Contribution towards defense production.
Low investment requirements.
Meeting major part of increased consumer demand.
Facilitating mobilization and exploitation of resources
Integration and development of industries with rural
economy.
Competitiveness in domestic and export markets.
Capacities to develop appropriate indigenous
technology.
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ROLE OF SMES IN INDIAN ECONOMY
Employment Generation
229.38
238.56
244.61
260
269.2
200
210
220
230
240
250
260
270
280
2006-07 2007-08 2008-09 2009-10 2010-11
Emplo
yment[inLa
kh]
Employment in Small Scale Sector
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EMPLOYMENT OPPORTUNITIES CREATED
IN DIFFERENT REGIONS
Tamil Nadu (14.5%)
Maharashtra (9.7%),
Uttar Pradesh (9.5%) West Bengal (8.5%)
Gujarat (7.6%)
Andhra Pradesh (7.5%)
Karnataka (6.7%)
Punjab (5.6%)
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ROLE OF SMES IN INDIAN ECONOMY
Production
722
754
793
840
865
650
700
750
800
850
900
2006-07 2007-08 2008-09 2009-10 2010-11
Productio
n[Rs.
000cr
ore]
Production from Small Scale Sector
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ROLE OF SMES IN INDIAN ECONOMY
Export
65
79
8689
94
0
10
20
30
40
50
60
7080
90
100
2006-07 2007-08 2008-09 2009-10 2010-11
Export[Rs.
000crore]
Export from Small Scale Sector
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ROLE OF SMES IN INDIAN ECONOMY
40% of the Indian Exports is being contributed
by SMEs . This share would increase to over 44 %
with the help of modernised technology.
The product group where the SMEs dominates in
exports are sports goods, readymade garments,
woolen garments and knitwear, plastic products,
processedfood and leather products.
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GROSS DOMESTIC PRODUCT
SME contribution to GDP :
Small and medium enterprises (SMEs) are
expected to contribute 22 per cent to India'sGross Domestic Product (GDP) by 2012, up
from about 17 per cent at present, according to
a survey by ASSOCHAM.
The projected increase is due to technological
upgradation.
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ECONOMIC INDICATORS
Small & medium enterprises have emerged as
a dynamic and vibrant sector of the economy.
Today, it accounts for nearly 35% of the grossvalue of output in the manufacturing sector
and over40% of the total exports from the
country.
In terms of value added this sector accounts for
about 40% of the value added in the
manufacturing sector.
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ECONOMIC INDICATORS
GLOBALLY
SMEs contribute over 90% of BusinessEnterprises and 50-60% of Total Employment.
SME business accounts almost one-third ofretail Net Banking Income (NBI), though itcomprises less than 10% of total retail bankingportfolio.
In Europe, Japan and the USA, 99% of theenterprises belong to the small business
segment.
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CHALLENGES FACED
Absence of adequate and timely banking finance
Limited capital and knowledge
Non-availability of suitable technology
Low production capacity Ineffective marketing strategy
Identification of new markets
Constraints on modernization & expansions
Non availability of highly skilled labor at affordable cost
Follow up with various Government agencies to resolveproblems
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WHAT COULD BE DONE
educate and empower them to make optimumutilization of the resources
informed of the latest developments taking place
globally helped to acquire skills necessary to keep pace with
the global developments.
start various activities to empower and educate the
SME Sector by organizing various trade promotionalactivities.
provide assistance and support for the promotion ofdomestic business as well as export promotion of
the SME sector.
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OPPORTUNITIES
Opportunities of growth in the SMEs sector areenormous due to:
Less Capital Intensive
Extensive Promotion & Support by Government
Reservation for Exclusive Manufacture by small scalesector
Funding - Finance & Subsidies
Machinery and Raw Material Procurement
Manpower Training, Technical & Managerial skills Tooling & Testing support
Export Promotion
Growth in demand in the domestic market size due to
overall economic growth
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SMES ESTABLISHED IN THE INDIAN
INDUSTRY
Food Processing
Agricultural Inputs
Chemicals & Pharmaceuticals
Engineering; Electricals; Electronics Electro-medical equipment
Textiles and Garments
Leather and leather goods
Meat products
Bio-engineering
Sports goods
Plastics products
Computer Software, etc.
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IMPORTANCE OF SMES
SMEs are much labour intensive than large scale.
Elasticity in SMEs are higher than large scale
concerns.
Capacity to adjust with changing environment.
SMEs are expected to earn more quick returns.
Helps reshaping the productive sectors.
Generates employment .
Creating an environment for entrepreneurship.
Promotes innovation.
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CONCLUSION
The SMEs, in particular, have a vital role to play
in making the growth regionally balanced, and
in generating widely dispersed off-farm
employment, some of it in rural areas. SMEs
are expected to create the bulk of new
employment, it is particularly important to
make the financial system more efficient inmeeting the needs of our expanding private
sector and to ensure financial inclusiveness.
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REFERENCES
www.smechamberofindia.com
www.smeworld.org
www.wikipedia.com www.dsir.gov.in
www.ibef.org
World retail banking report 2010
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THANK YOU