The SMEs (Small and Medium Enterprises) play a significant role in the Indian economy. They form the major contributors to the country’s GDP and also as the employment hub of the country. The MSME (Micro, Small, and Medium Enterprises) are gradually empowering their role in the manufacturing sector as well. The importance of the SMEs in the manufacturing industry of the nation is due to the immense quantum of industries and units that fall under this category. Around 90% of the country’s industries fall under the manufacturing sector. Therefore, this sector plays a pivotal role in the development of India’s economy.
The industrial units in India under the SMEs (Small and Medium Enterprises) are categorized on the basis of their size of the investment. The manufacturing units or enterprises are classified on the basis of their investment in the plant and machinery, while in the case of the services, they might be classified on the basis of their investment in equipment.
As per the UNIDO (United Nations Industrial Development Organization), the manufacturing clusters are the collection of interconnected manufacturing SMEs and related institutions. The clustered manufacturing SMES enjoy the following benefits:
- External economies related to specialized sector-specific labour skills and raw material supplier.
- Customized services like the financial services for the manufacturing enterprises.
- Platform for developing cooperation at the public, private, and inter-firm level institutions to foster innovation and production.
- Support from the leading business associations of the niche as well as the provision of technical assistance providers.
To enable the growth of the manufacturing unit in the SMEs, the government recognizes some important measures:
- Harnessing the financial growth of the SMEs in the manufacturing sector.
- Dealing with infrastructure issues and finding relevant solutions to them.
Empowering the SMEs in the manufacturing sector to facilitate the growth of the Indian economy.