• By the enactment of small and medium
enterprises development Act ,2006 the
small and medium sector has been
defined as small and medium enterprises
with effect from OCTOBER 2006 .
• The classification has been done on the
basis of investment in Plant and
Machinery in case of manufacturing
enterprises and investment in equipments
in case of services .
These are those Enterprises where the
investment in plant and machinery is more than
25 lakh Rs. But does not exceed 5 crore Rs.
Where the investment in equipment is more than
Rs 10 lakh but does not exceed Rs 2 crore .
These are those where the investment in
plant and machinery is more than Rs. 5
crore but does not exceed 10 crore .
Where the investment in equipment is more
than two crore Rs but does not exceed 5
crore Rs .
1.To create permanent employment opportunities
To public at large at relatively small costs
2.To meet a major part of the increased demand for
Consumer goods and simple producer goods .
3.To ensure more equitable distribution of national
Income to society at large scale .
4.To facilitate the mobilisation of resources which might
Remain inaquately utilised .
ROLE OF MSMEs
1.Share in industrial output.
3.Equitable distribution of national
4.Regional dispersal of industries.
5.Contribution to Export.
6.Less industrial Disputes.
1.Finance And credit.
3.Availability of Raw material.
4.Machines and other equipments.
7.Problem of sickness.
1.SMe’s are much labour intensive than large
scale industry.They provide more scope for the
employment of workers .
2.SSI are also substainable as they are essential
for combating poverty and employment .
3.The social cost of developing small units
specially handicrafts and village industries is
4.Elasticity in technical and economic
organisation in SSI is high as compared to large
5.SSI are expected to earn more quick returns on
capital invested in such industries where;
gestation period is quite short in comparison to
large scale industries .
This Act was passed on october 2 , 2006.The main feature
1.Setting up of a National Board for MSMEs.
2.Classification of enterprises
3.Advisory committees to support MSMEs
4.Measures for promotion , development and enha
5. Schemes to control delayed payments to MSME
SMALL AND MEDIUM ENTERPRIS
DEVELOPMENTAL ACT, 2006
1.During 2010-11 Rs 4000 crore was
provided to SIDBI for refinancing
incremental Lending by banks to these
enterprises.For the year 2011-12 the
government has Provided Rs 5,000 crore
to SIDBI for the Same purpose .
2.Handloom weavers have been facing
economic stress so the govt. made a
Provision of Rs 3crore to NABARD.