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Small and Medium Scale Enterprises in India

Updated on 19 January 2021
study24x7
K-12-Commerce
18 min read 4 views
Updated on 19 January 2021

What are small and medium enterprises? Well, Small and Medium Enterprises in India are the businesses whose employees are under certain limits. SME is used as an abbreviation to represent such businesses. This is used by the international organizations i.e. the UN, the World Trade Organization and the World Bank. Many people are employed under SMEs which sometimes outnumber the other companies.


According to a report, Australian SMEs account for 98% of all Australian businesses. Moreover, it produces one – third of the total GDP. In the present scenario, around 4.7 million people are employed under SMEs and this is increasing day by day.


SMEs are important for economic and social development and play a major role in employment. Micro Small and Medium Enterprises includes investment in Plant and machinery. This investment accounts for Rs. 25 Lakhs and cannot be exceeded more than this amount. This is a branch of the Government of India and includes the rules and regulations regarding the small and medium enterprises in India. 


The annual budget accounts for Rs. 6,552 crores and the ministers for SMEs are Nitin Adhikari and Pratap Chandra. The Khadi sector is the main institution which is undertaken by the government. These enterprises also focus on agriculture-based and other rural industries. In short, this is an effort made by the government to make the local products primary than the western brands. It is a step taken by the government to benefit the local retailers.


These enterprises provide the following services:

  1. Technical and managerial level of consultancy is provided
  2. There is a department for the assistance of exports
  3. There are pollution and energy audits


There are many more services that are provided by the MSME sector. In terms of providing small medium enterprise examples, it is seen that the copper and nickel companies have 1500 or more employees. On the contrary, silver companies account for 250 employees at present. Some of the other examples are listed below.


  1. DFM foods: This Company is a leading manufacturer of packed snacks. This company was established with a lot of struggle as highlighted by Mohit Jain, MD of the company. This company is the first to manufacture the CRAX corn rings and puffs. 


  1. MYND Solutions: This is a business outsourcing firm that provides finance and human resource suggestions and advice. They help their clients by making the maximum profits possible. 



These are some of the SMEs which are established for a short period of time but have helped people in earning profits. The above-mentioned are some of the SME examples.


What is the Role of an SME in India?


SME is defined as the Small and Medium enterprises which are responsible for the investment in plant and machinery. There are two kinds of SMEs namely the manufacturing ones and the service providing ones. Below is the table for the investment and turnover estimate.


COMPANIES

INVESTMENT

TURNOVER

Small Enterprise

From 1 – 10 Crores (Approx.)

From 5 – 50 Crores (Approx.)

Medium Enterprise

From 10 -20 Crores (Approx.)

From 50 – 100 Crores (Approx.)

    

This table shows the estimate of the companies of small and medium scale. The investment and the turnover estimates help the companies in investing as much money as they are capable of. 


Small and Medium Enterprise definition includes investment ranging from 1 Crore to 100 Crores in both small and medium scale businesses. This investment helps in bringing the local retailers at the forefront, thereby making beneficial deals for them.


The local retailers are benefited which leads them to have a better standard of living and earning good profit. On the other hand, MSME's full form is Micro Small and Medium Enterprises which deal in the investment of plant and machinery. The investment and turnover rate of these MSMEs ranges from Rs. 5 Crores to Rs. 250 Crores. The table below explains this.


ENTERPRISE

TURNOVER ESTIMATE

Micro Enterprise

Up to Rs. 5 Crores

Small Enterprise

From Rs. 5 Crores to 75 Crores

Medium Enterprise

From Rs. 75 Crores to Rs. 250 Crores


The table shows the estimate of the MSMEs. Both MSMEs and SMEs result in a good and positive economic growth of the nation. The small scale retailers are benefited from such steps taken up by the Government of India. There is a positive approach in terms of buying, selling and investing in these small and medium enterprises. Thus, small and medium enterprises in India along with MSMEs add to the economic development of the country. 


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