R O LE O F S M E s IN IN D IA N

EC O N O M Y





 Monirba {Allahabad
university}
 Supported by – Manish
kanojia (MBA III sem}
 DEFINITION :
 A) MANUFACTURING ENTERPRISE :-

SEC – 65 {A} 1&3


 A small enterprise, where the investment in

plant and
 machinery is more than twenty five lakh
rupees but does
not exceed five crore rupees


 where as

 B) SERVICE ENTERPRISE :-


 SEC 65 {B} 1&3 -




A small enterprise, where the investment in
equipment is more than ten lakh rupees but does
not exceed two crore rupees;
 where as


 A medium enterprise, where the investment in

equipment is more than two crore rupees but does
not exceed five crore rupees

PERIODIC REVISIONS OF DEFINITIONS
OF SMEs

1950-51

1958-59


Capital assets not Capital investment is

exceeding Rs. 0.5 less than Rs. 0.5
million. million.
 
Employment less then As it was in 1950-51,
50 workers per day per day employment
{with use of power} criteria was replaced
or less than 100 by a “per shift”
workers per provision.
day{without use of
power}
Contd……………………

1980-81
  1987-98
Up to Rs. 2 million only. Up to Rs. 30 million
 

Units located in rural Government of INDIA

areas/towns with a has since decided to
maximum population lower the ceiling from
of up to 50,000 as per Rs. 30 million to Rs.
1971 census. 10 million.



Contd……………………….
1999-2000


Up to Rs. 10 million


The limit for the units in
selected products of
knit wears and hand
tools was allowed up
to Rs. 50 million.
OBJECTIVES:

Creating permanent and immediate employment.



Meeting major part of increased consumer

demand.


Facilitating mobilization and exploitation of

resources.

Integration and development of industries with
rural economy.

Ensuring equitable and justifiable distribution of
 ROLE OF SMEs IN INDIAN
ECONOMY

EMPLOYMENT GENERATION:


E m p lo ym e n t o p p o rtu n itie s cre a te d in d iffe re n t
re g io n s:

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%)
and Punjab (5.6%)
P R O D U C T IO N :
In cre m e n t in p ro d u ctio n :
SMEs Contribute 40% of the gross manufacture to
the Indian economy.

An increment of 31.21 lakh in 1999.

EX PO RT :
Cont…………….
45% - 50% of the Indian Exports is being
contributed by SMEs .

The product groups where the SMEs dominates in
exports, are
 -sports goods, readymade garments, woollen
garments and knitwear, plastic products, processed
food and leather products. 


G R O S S D O M E S T IC P R O D U T:
SME Contribution to GDP:



The total production of SMEs was 61,228 croresin
1985-1986 which rose to 6, 25,000 in 2000-01.


 The Eleventh Plan, therefore, aims at an increase in

investment in the private sector to 28.7% from an
average of 25.1%in the Tenth Plan.


 SMEs Contribute to 9% of GDP of INDIA , It

contributes 40% of the gross manufacture to the Indian
economy.

E C O N O M IC IN D IC A T O R S :
Small & medium enterprises have emerged as a
dynamic and vibrant sector of the economy.

- Today, it accounts for nearly 35% of the gross value



of output in the manufacturing sector and over

40% 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. 
O p p o rtu n ity :

 The opportunities in the small-scale sector are

enormous due to the following factors:

Less Capital Intensive

Extensive Promotion & Support by Government
Growth in demand in the domestic market size
Raw Material Procurement
Manpower Training

Per capita income


Social justice.
 LIST OF ITEMS RESERVED
FOR EXCLUSIVE MANUFACTURE
IN SMALL SCALE SECTOR
Food and allied industries
Textile products including hosiery
Wooden and wood products
Paper products
Rubber products etc.
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.


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 in meeting the needs of our expanding

private

BIBLIOGRAPHY:-
INDIA 2009 -(MINISTRY OF INFORMATION
&BROADCASTING)
Economic Survey 2008-2009
Entrepreneurship and small business
management :- M.B. SHUKLA
MINISTRY OF SMALL AND MEDIUM ENTERPRISE:
 www.dcmsme.gov.in
 www.google.com
 www. Wikipedia.com