The SME full form stands for small and medium enterprises. These companies maintain a certain threshold of revenue, number of employees and assets. Apart from the small and mid-sized companies, there are companies who employ only 10 employees, known as micro enterprises.
Small and Medium scale enterprises are distinguished by their capital. Small scale enterprises operate with a capital of minimum of Rs. 25 Lakh to a maximum of Rs. 5 Crore. For service sectors, it works on a total capital of Rs. 10 Lakh to Rs. 2 Crore.
Medium scale enterprises in the manufacturing sector works on a total capital of Rs. 5 Crore to Rs. 10 Crore. Service sector enterprises usually maintain a capital of Rs. 2 Crore to Rs. 5 Crore.
The SME sector is one of the most dynamic parts of the country’s economy. In fact, in India, this industry has grown steadily over the past 5 decades. They offer large-scale employment opportunities at a relatively lower capital cost. Moreover, these organisations help in the industrialisation of economically backward areas. As a result, the regional imbalances are reduced and a more equitable distribution of national wealth and income gets executed. SMEs also act as ancillary units to large industries. They contribute to the socio-economic development of a country’s infrastructure.
SMEs play a crucial role in a nation’s progress and development. Contributing immensely to a country’s domestic production, low investment requirements, export earnings, low intensive imports, they help in the development of indigenous technology. Moreover, they help to generate new entrepreneurs by sharing knowledge and training.
Owing to their contribution to the country’s economy, these enterprises are offered incentives and favourable tax treatment. The SME loan has been designed to allow small businesses avail loans to fund their expenses. Moreover, the government uses a range of beneficiary policies to organise these small businesses. These customised loans help in the profitability of the SMEs.
There are about 42.50 million registered and unregistered SMEs in India. They employ around 106 million individuals which accumulate to 40% of the country’s workforce. Producing more than 6000 products, SMEs have maintained an average growth rate of 10%.
Seeing this sector’s contribution to India’s GDP and entrepreneurship, the Indian government has launched several initiatives to further their advancement. Some of the key schemes include –
Recently, the government passed a bill stating that the classification of SMEs shall be based upon their annual turnover and not upon the investment made for business operations. With the implementation of newer economic reforms, SMEs will play a much more significant role in future.
If you are a working professional and now want to start your own business, then you have plenty of opportunities. Small scale businesses that are successful can now be your career choice and excel in it.
Some good small business ideas are also suggested here to start in India. If you do not want the conventional career path of a job, then you too can become a successful entrepreneur. You may select one from the best business ideas that are on the growth in India currently.
Once you start and prepare your business for the growth phase, you will need substantial funds. These funds will help you purchase the latest equipment, expand your infrastructure, handle all advertising and marketing tasks.
You can overcome your budget issues by taking up an SME Loan. The SMEs are known as India’s ‘engine of growth’. Better opportunities and rapid innovations have made them a lucrative sector today. They are thriving and taking the country’s success ahead.
Aditi Ahuja is a noted Financial Consultant and Adviser. she is a tech blogger and writer too. She loves to keep updated herself on this and one may get the best suggestion in both of the industries from her. She loves to travel in her free time. Here are some good to read a blog like best phones under 20000, laptop buying guide and more, that you can find interesting if read.
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