Explains how small sector is run in In India what is its role and how is it classified. How it contributes to national income and what are the challanges being faced by it

1. ROLE OF SME’S IN ECONOMIC GROWTH OF
INDIA

2. INTRODUCTION
 Small and medium enterprises are the backbone of
industrial development.
 It is very important for both developed and developing country
Small and medium enterprises always represented the model of
economic development, which emphasized high contribution to
domestic production, significant export earnings, low investment
requirements, employment generation, effective contribution to
foreign exchange earning of the nation with low import-intensive
operations.
 The development of this sector came about primarily due to
the vision of our late Prime Minister Jawaharlal Nehru who
sought to develop core industry and have a supporting
sector in the form of small scale enterprises.


3. INTRODUCTION……..
 SMEs sector has emerged as a dynamic and vibrant sector of the
economy. The Indian economy is expected to grow by over 8 per
cent per annum until 2020 and can become the second largest in
the world, ahead of the United States, by 2050, and the third largest
after China and the United States by 2032.

4. DEFINITION OF MSME
•  According to new THE MICRO, SMALL AND
MEDIUM ENTERPRISES DEVELOPMENT ACT,
2006 the MSME
• Definitions are as follows: In the case of
the enterprises engaged in the
manufacture or production of goods
pertaining to any industry specified in the
first schedule to the Industries (
Development and Regulation) Act, 1951, as

5. DEFINITION OF MSME FOR MANUFACTURING
SECTOR
Manufacturing
Sector
Enterprises Investment in plant & machinery
Micro Enterprises Does not exceed twenty five lakh rupees
Small Enterprises More than twenty five lakh rupees but does
not exceed five crore rupees
Medium Enterprises More than five crore rupees but does not
exceed ten crore rupees

6. DEFINITION OF MSME FOR SERVICE SECTOR
Service Sector
Enterprises Investment in plant & machinery
Micro Enterprises Does not exceed ten lakh rupees:
Small Enterprises More than ten lakh rupees but does
not exceed two crore rupees
Medium Enterprises More than two crore rupees but does
not exceed five core rupees

7. SUPPORTING AGENCIES OF SMES
 Some of the important organizations that are associated with SMEs
in India are: Small Industries Development Organization (SIDO),
National Small Industries Corporation Ltd. (NSIC), Small Industries
Development Bank of India (SIDBI), Confederation of Indian Industry
(CII), Laghu Udyog Bharti (LUB), Federation of Indian Chamber of
Commerce and Industry (FICCI), Associated Chamber ofCommerce
and Industry of India (ASSOCHAM), National Institute of Small-
Industry Extension Training (NISIET), World Association for Small
and Medium Enterprises (WASME), Small Scale Industries Board
(SSIB), PHD Chamber of Commerce and Industry (PHDCCI),
Federation of Indian Exporters Organization (FIEO), Federation of
Associations of Small Industries of India (FASII)

8. ROLE OF SMES IN INDIAN ECONOMY
 In order understand the impact of SMEs on the Indian economy;one
must study the trend and pattern that have been prevalent in the
preceding years. It gives us the vivid picture of what follows next.
Following graphics help us to understand the present scenario and
their contributions of MSMEs in India.

9. MSMES SHARE BY SECTOR

10. GROWTH PERFORMANCE OF SMES OR MSMES
IN INDIA

11. EMPLOYMENT IN MSME SECTOR

12. SECTOR WISE MSME

13. ACTIVITY WISE MSME

14. THE OPPORTUNITIES OF GROWTH
IN THE SMES SECTOR
 1. Less Capital Intensive
 2. Extensive Promotion & Support by Government
 3. Reservation for Exclusive Manufacture by small scale
sector
 4. Project Profiles
 5. Funding - Finance & Subsidies
 6. Machinery Procurement
 7. Raw Material Procurement
 8. Manpower Training
 9. Technical & Managerial skills
 10. Tooling & Testing support
 11. Reservation for Exclusive Purchase by Government
 12. Export Promotion
 13. Growth in demand in the domestic market size due to
overall economic growth
 14. Increasing Export Potential for Indian products

15. FACTORS AFFECTING SMES
 MSMEs in India face several problems such as-
1. lack of availability of adequate and timely credit
2. High cost of credit
3. inadequate infrastructure facilities like power, water and
roads, and lack of access to modern technology.
4. limited access to equity capital
5. problems in supply to government departments and
agencies
6. procurement of raw materials at a competitive price
7. Issues of storage
8. Designing, packaging and product display

16. CONCLUSION
 In India SMEs has achieved steady growth over the last
couple of years. 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, precision engineering, information
technology, pharmaceuticals, agro and service sectors.
Under the changing economic scenario the SMEs have
both the opportunities and challenges before them.