Role of Smes & Msmes in Indian Economy

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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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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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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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

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Role of Smes & Msmes in Indian Economy