The document discusses small and medium enterprises (SMEs) in India. It defines SMEs and describes their importance to the Indian economy, including generating employment and contributing to industrial output and GDP. SMEs face challenges such as lack of financing, outdated technology, and marketing problems. The government has implemented various support measures for SMEs but they still struggle with issues like delays in payments, global economic fluctuations, and lack of infrastructure. With opportunities in new sectors and less government intervention, SMEs have prospects for growth if they improve technology, management, and increase capacity utilization.

1. A U T H O R : D . R A M K U M A R
C O - A U T H O R : A . A N D H U L M A L O A N T O N Y
D E P T O F B B A , S T . J O S E P H ’ S C O L L E G E .
A study on problems and
prospects of SMEs

2. INTRODUCTION
 Small and medium-sized enterprises (SMEs) are non-subsidiary, independent
firms which employ fewer than a given number of employees.
 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 service sector.
 SMEs sector has emerged as a dynamic and vibrant sector of the economy.
 The Indian economy strongly depends on entrepreneurship and SMEs
contributes to it.
 There are about twenty-one major industry groups in the small scale
sector dealing in various products
 SMEs can be considered a must for developing countries.

3. SMEs IN INDIA
 DFM Foods, Delhi.
 Ankur Scientific Energy Technologies, Vadodara.
 SL Packaging, Kolkata.
 Staragri Warehousing And Collateral Management, Jaipur.
 Mynd solutions, Gurgaon, Haryana.
 EMMBI Polyarns, Mumbai.
 Aastha Minmet India, Mumbai.
 Chem Process system, Gujarat.

4. IMPORTANCE AND ROLE SME PLAYS
 Small and medium enterprises are the backbone of industrial development.
 Share in industrial output.
 Employment generation.
 Equitable distribution of national Income.
 It enhances GDP.
 Contribution to Export.
 Less industrial Disputes.
 Developing cost is low.
 Facilitates the mobilization of resources which might Remain inadequately
utilized.
 Tackles poverty and unemployment.
 Labour Intensive.
Economy driver
Employment
generator
Sector
growth

5. Why SME’s are more adoptable?
Simple to
organized
Low risk
Innovation
and new
concepts
Low
finance
Skill
prompters
Independent
structure
* SME’s develop
sector, size, focus,
resource and
business
environment

6. SUPPORT MEASURES for SMEs
 SIDO was set up in 1954 as an apex body for sustained and organised
growth of micro, small and medium enterprises.
 Small Industries Service Institute (SISI) were set up all over India to
train youth in skills/entrepreneurship.
 District Industries Centres (DIC) were set up all over the country.
 Credit Guarantee Scheme
 National Manufacturing Competitiveness Programme Scheme
(NMCP).
 TREAD scheme(Trade Related Entrepreneurship Assistance and
Development).

7. PROBLEMS & CHALLENGES
 Extreme competition.
 Poor or out-dated Technology base.
 Lack of Skilled workers.
 Lack of financial resources.
 Marketing and Distribution problems.
 Lack of Infrastructure.
 Delayed payments.
 More prone to global fluctuations.
 Disinterest shown from second generation.
 Poor follow up with government measures and services.

8.  The major constraint faced by SMEs in India is "Power" i.e.
Man Power
Electric Power
Money Power
Purchasing Power
Political Power

9. PROSPECTS & OPPORTUNITIES
 Employment generation.
 Exposure to foreign market.
 Emerging area of business.
 Less Government Intervention.
 Better industrial relation.
 Removal of regional disparity.
 Can perform activities that are not economically viable for
large enterprises.

10. CONCLUSION
 We can conclude that in this competitive world SMEs need to conider the
following in their growth prospective:
- Improve quality of input output by using more innovative and economic tools in all the
level.
- Increase utilization of installed capacity.
- Improve Management, Accounting, Consulting and supporting services.
- Government should reserve rural market for SME’s and protect them from
competition by big industrial houses.
- Increasing the Technology Upgradation Fund (TUF).
 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, pharmaceuticals, agro and service sectors.
Under the changing economic scenario the SMEs have both the opportunities and
challenges before them.
 Thus, we can say that if improvement is made to certain factors then it can frame
the base for the future growth and turn the situation into improved productivity,
profitability & complacency for whole organisation.