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Submitted To: Prof. C.S.

Balasubramaniam

Group Members
Name
Amey Londhe

Roll No
87

Pratima Patil
Supriya Pawar Shirish Salian Sanjay Vanjari

98
100 108 115

DEFINITION OF SME
SME is the abbreviation for Small and Medium Enterprises. These enterprises can be rightly called as the backbone of the GDP of India. The SME sector in India is growing at an exceptionally fast rate due to which it is proving to be beneficial to the Indian Economy.

Small and Medium Enterprise (SMEs) definition

Manufacturing Sector

Enterprises Investment in plant & machinery


Small Enterprises Medium Enterprises More than twenty five lakh rupees but does not exceed five crore rupees More than five crore rupees but does not exceed ten crore rupees

Service Sector

Enterprises
Small Enterprises

Investment in equipments
More than ten lakh rupees but does not exceed two crore rupees More than two crore rupees but does not exceed five core rupees

Medium Enterprises

Major Sectors of SMEs

Textiles and Paper Service industries Automotive components Food and beverages IT Tobacco and Wood/Furniture Pharmaceuticals Electronics Agriculture ET and others

Role and Importance of E


Indigenization
Employment generation

Promotes exports

* SMEs develop sector, size, focus, resource and business environment

Mobilization of resources and entrepreneurial skill

Supports the growth of large industries

Equitable distribution of income

Provides opportunities for development of technology

Regional dispersal of industries

FIGURES ABOUT SMES


The Indian SME market is worth $5 billion. There are over 11 million SME units in India that produce more than 8,000 products. SME's Contribution towards GDP in 2011 was 17% which is expected to increase at the rate of 22% by 2012. SMEs are the fountain head of several innovations in manufacturing and service sectors, the major link in the supply chain to corporate and the PSUs. By promoting SMEs, the rural areas of India will be developed.

Role of SMEs in the growth of indian economy

35%
INDUSTRIAL EXPORT

40%
TOTAL OUTPUT OF INDIA

60 MN
EMPLOYMENT GENERATED

1.3 MN
JOB PER YEAR

8000
QUALITY PRODUCT GENERATED BY THEM FOR INDIAN AND INTERNATIONAL MARKET

90%
INDUSTRIAL UNIT IN INDIA

REASON BEHIND SURVIVAL & GROWTH OF SMEs IN INDIAN ECONOMY

REASON BEHIND SURVIVAL & GROWTH OF SMEs IN INDIAN ECONOMY


Govt. policy, tariff and easy loan with low interest rate for SMES in help to grow these enterprises. Foreign and local fund providers are taking huge interest in the small and medium enterprises of India. Banking sector has also shown a keen interest in lending credit to these enterprises. Recent mergers have taken place in the sector. The sector has significantly contributed towards the domestic production as well as the export earnings. Low investment is required to start and maintain these enterprises. The sector has contributed impressively towards job creation and increase in individual incomes.

Technological growth is also a factor for growth of SME's in India as there are several trade portals and BUISNESSESS DIRECTORIES available online with huge database of buyers, sellers, manufacturers who are basically back bone of SME's.

Scheme of govt. of india for SMEs


ISO 9000/14001 Certification Fee Reimbursement Scheme Micro & Small Enterprises Cluster Development Programmed Credit Linked Capital Subsidy Scheme Intellectual Property Rights for MSMEs Quality Management Standards/Quality Technology Tools

Facing Problems by SMEs

Financial planning

Low production capacity

Limited knowledge/ lack of skill labour

Ineffective marketing

Infrastructure problem

Not adoptability of new technology

Indian SMEs doesnt get proper support from


o Government Departments o Banking Sectors o Financial institutions o Corporate sectors

Because of this SMEs cant trade on national and international market.

Though its contribution in Indian Economy o 45% of Industrial output o 40% of Export o 42 million in employment generation o More than 8000 quality products for national and international trade

Conclusion: What should India adopt from this two country SMEs industry?
1. Increase utilization of installed capacity
2. Increase information, orientation and facilities 3. Specialized training for administrative, local, national and world market, research and development, innovation and education 4. Improve - Management - Accounting - Consulting and supporting services - Primary and industrial education level 5. Improve quality of input output by using more innovative and economic tools in all the level

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6. Create awareness about global trade laws 7. Subsidies import and export policy of SMEs 8. Increase the coverage of technology and up gradation fund (TUF) 9. Government should reserve rural market for SMEs and protect them from competition by big industrial houses 10. Facilitate by credit instruments support and lowering down rates for start ups and at the time of economic crises.