SME sector
Earlier, the large organizations were only considered potential economy boosters. However, the scenario has changed significantly in today’s era, wherein not just the big companies but also the small and medium-sized enterprises (SMEs) are reflected to be the growth engine of the Indian economy. The reality is that there are over 5.5 crore small enterprises that drive our Indian economy through manufacturing, exporting, importing, trading, etc. With an immense potential to grow across the nation and at international level too, this sector comprises 36 million units contributing around 8% to the nation’s GDP. Along with this, the SME sector has been successful in providing employment opportunities to millions of people. Currently, the employment opportunities have provided jobs to around 80 million people and above. The number of employment opportunities is only bound to grow, considering the rising achievements by this sector.
The Founder & President of SME, Chamber of India, Mr. Chandrakant Salunkhe, who is also the founder and CMD of Macro Group had shared his important viewpoints and opinions on the importance of the SME sector for the growth of the Indian economy.
He said that the SME sector is the growth engine of the Indian economy. He further added that it is a broad sector that comprises manufacturing, infrastructure, service industry, packaging, chemicals, food processing, and even venturing into the information technology sector.
The SME contributes 45% to total manufacturing output and 40% to the exports from the nation. The SME sector in India is providing employment to more than a million people every year. It is the largest sector also the training sector for many unemployed and unskilled people. For the last 10 years, efforts are being made to encourage entrepreneurship amongst the youth so that they start their own business.
SME sector faces multiple challenges and obstacles till date, in spite of their rapid growth and phenomenal performances also the contribution rate to the growth the Indian economy.
The issues, the SME sector faces includes –
Not getting adequate support from Banks, from the Government Departments, various Financial Institutions, and Corporate. Other challenges are being small sized, owner driven, insufficiency of quality products, poor governance standards, inappropriate accounting systems, succession risks, business risks, etc.
The small and medium-sized enterprises usually have limited capital and limited knowledge. They do not have sufficient availability of suitable information technology. They have the ineffective marketing strategy. These are certain loopholes in their path to success. However, with their might and talent, most of these small and medium-sized enterprises manage to overcome these obstacles and achieve milestones. This sector brought a revolution in the entire economic system. As per the analysts, it is assumed that this revolution started gradually from the 90’s.
Multiple business enthusiasts preferred the option of getting into the SME sector than to work for large organizations or multinational companies. Family businesses were also preferred.
When the technology boom and advancement entered the SME sector, the youth became more enthusiastic to consider getting into the small and medium-sized sector.
With good technical knowledge and understanding of the industry, finance and other such domains, today’s youths are leading the sector very efficiently.
Focusing on quality, productivity, and accuracy should be the priority of the SME sector.
This sector has indeed witnessed a drastic transformation in their functioning patterns and performance.
However, with the advent of international organizations in the sector, the SMEs might experience the attrition of the skilled manpower, trained and developed by the SME sector itself.
This is indeed a big challenge for the SME sector, which they might overcome by building up strong technological base, competitive spirit among employees, adopting innovative approach to survive in the present competitive environment, promising and providing growth on professional grounds to their employees or other lucrative plans for success and achieving great experience and revenues in the SME sector to their skilled employees, so that they continue to work with them and not opt for the large organizations.
The National Skill Development Council has been active in providing necessary training to youth to work in SME sector.
The SME sector is a crucial part of the Indian economy.
It is also considered significant in the light of the ‘Make in India’ campaign launched by the government of India.
Owing to the achieving vigor of the SME sector, the Government of India has formulated multiple policies to enable smooth functioning for them. Many banks have come up with a lending pattern, loans for even the startups.
Also in order to raise funds, SMEs range bound with own funds or by pooling funds from family, relatives, and friends. However, this is generally inadequate for better growth.
The government of India is implementing certain programmes in order to promote and develop proper infrastructure to improve the productivity and competitiveness of the micro, small and medium-sized enterprises. It is generally believed that a large number of micro small and medium enterprises.
Some SMEs use outdated technology because of insufficient finance, poor accessibility to modern technology, an absence of research and development units etc.
In order to upgrade the technology, the government of India is implementing cluster development programmes and preparing evaluative study reports and detailed project reports for the micro and small enterprises. Meanwhile, the government is also taking steps like a soft intervention, hard intervention, providing common facility centers and infrastructure development for such organizations.
A revolutionary initiative for SME was unleashed governments task. Thereafter a framework was laid down for setting up the stock exchange and trading platforms diverted towards the SMEs. In accordance with this framework, BSE SME exchange was launched also launched and later the NSE SME Platform was launched.
SME Exchange in India is at an evolutionary stage. However, its existence globally has been for several years.