An Overview of Scope and Growth of SME Business in India

India has got tremendous scope for investors and entrepreneurs as far as business opportunities are concerned. Especially India has always been in the limelight in terms SME business. By SME business, we mean small and medium enterprises that maintain revenues or a number of employees below a certain standard. Every country has its own definition of what is considered as a small and medium-sized enterprise. In India, an industrial undertaking that has investments in fixed assets which do not exceed more than Rs.10 million falls under the category of small business. A small-sized enterprise is a company with less than 50 employees while a medium-sized enterprise is one with fewer than 250 employees. Growth of the Indian economy has accelerated to 8% and efforts are on to further propel it to 10%. Undoubtedly, all the segments of the economy, viz. agriculture, industry and services have to improve their contribution to the economy. Growth of small and medium enterprises (SMEs) is a sine qua non for the growth of industry, exports and other segments of the economy. Furthermore, promotion of entrepreneurship is also vital for sustenance and upward movement of the current growth trajectory of the economy. The SME sector acts as a catalyst in upholding and encouraging the creation of the innovative spirit and entrepreneurship in the economy, thereby helping in laying the foundation for rapid industrial development. Moreover, the sector also serves the vital objectives of employment generation and balanced regional development. Globalization and liberalization of the Indian economy have also brought a host of opportunities for the industrial sector, particularly the SME segment. While SMEs have responded to competition reasonably satisfactorily, there is scope for increasing their export potential, domestic market share and developing them as serious players in the global value chain. The SME business opportunity in India can be seen in possibly every sector - financial services, telecom, education, automobiles, media, food, real estate and so on. This makes India a hub for best small business opportunity in various segments. Thus, one who wishes to explore the business opportunity in India must have a look at the SME and retail business ideas to get an idea about the business scenario in India.

Transportation and Logistics. small business becomes a major source of income for many residing in these areas. Twenty sectors. Electronics and IT Hardware amongst others as some of the sectors with higher growth potential. SME businesses are the biggest contributor to the economy of any country and the same goes with Indian economy. SME is one of the most crucial sectors of Indian economy as far as the number of employments generated from this segment. the report emphasized on enhancing the skill and technical education capacity to about 15 million (considering that even sections of the existing workforce would have to be trained). the report suggested a slew of measures including implementation of vocational education in schools. Food Processing. Auto and Auto Components. To address the issue.4 million. It is expected that this 15 million would be the required skill development capacity in vocational training in itself as a large portion of the employment (as well as workforce input) would occur in the lower portions of the skill pyramid. In fact. They are a major source of entrepreneurial skills. innovation and employment.IMaCS Report identified sectors like Gems and Jewellery. The report. With about 12 million persons expected to join the workforce every year. and an existing skill development capacity of about 3. Organised Retail.SME and Indian Economy Small and medium sized enterprises play a central role in the Indian economy. however. most of them dominated by small and medium enterprises (SMEs). adequate initiatives are required in the right 'scale' and 'speed'. pointed out that India faces a challenge of mammoth proportions of producing a skilled workforce of 500 million to meet the requirements of a projected CAGR of 8 percent of GDP by 2022. according to a new report. As more than 65% of Indian population lives in rural and semi rural areas. are likely to drive the growth of the economy and play a significant role in generating employment as well. The FICCI. Information Technology (IT). small business in India is the second largest employer of human resources. to drive Indian economy Twenty industrial sectors. creation a large talent . mostly SMEs. The report added to achieve the target of skilling about 15 million persons every year and ensuring that the workforce of 500 million is adequately skilled by 2022. Textiles. After agriculture.

setting up a national skill exchange. An investment in any best small business opportunity promises lucrative returns and success in less time. there is an opportunity for competitive advantage that can benefit investors and entrepreneurs to a large extent. Increased purchasing power and consumerism is what drives the business scenario in India. investors planning to invest in this sector must ensure that they make a wide choice and use the resources available in the right way to reap the benefits. Challenges Faced By Indian SMEs SME sector is the strength of present day economy and one of the most important segments for any nation. a lack of orders. There are a lot of retail business ideas for entrepreneurs who are interested to set up a SME business in India. sales and government regulation. These SMEs have fostered the Indian economy's competitiveness in an increasingly challenging global economic picture.oriented industries Import substitution Location wise mobility Low intensive imports Competitiveness in the domestic market Competitiveness in the export markets The India small business opportunity is getting quite exciting and innovative with the passing of every year. The survey found that SMEs are more concerned with issues like staff shortages. . However. Reasons behind growth in SME business There are various reasons due to which the small scale business in India has witnessed a spurt of growth. and targeting skill development at all levels of the skill pyramid New opportunities in SME business The SME business market of India is large and bubbling with newer opportunities.pool through modular employable skills. Thus. Some of these factors are: • • • • • • • • • • • • High contribution to domestic production Low investment requirements Significant export earnings Capacities to develop appropriate indigenous technology Operational flexibility Contribution towards defense production Technology .

The best use of technology no doubt enables enterprise in reducing cost of production. maintain consistency in quality. you fail indeed. which is usually the outcome of improper planning and strategy. the online marketplace also support their communication needs and help them display an array of products. if you are in debt then you have to be careful from your bankers and suppliers and off course your employees who will be on your nerves on the salary day. Lack of Finance: It has emerged as the most critical barrier for perfect capacity utilization and competing in the market. SMEs must . any small or medium company is always constrained by its scarcity of budgets. Lack of Knowledge: Lack of knowledge and information about the various schemes announced by the government. improve productivity and finally develop the competitiveness of the enterprise.Paucity of marketing support and limitation of the resources is a characteristic of all SMEs. Not only they solve companies problem of reach to the buyers worldwide. especially for high risk projects. SMEs are not able to raise adequate funds from banks. Moreover. Lack of Marketing Assistance:One of the chief problems that they do not have marketing expertise or not in a position to hire someone who can jazz up their sales. Lackof Technology:One of the crucial factors that prompts in the success or failure of enterprise is technology. In this framework the discussion focuses on SME's typical traits and how these effect upon marketing characteristics within SMEs. which in turn limits its growth. When it comes to marketing of products or services internationally. A B2B marketplace is a platform where sellers can list their businesses free of cost and leverage the power of internet. Lack of Planning:Another problem that is mainly faced by SME sector is the proper division of time.Insufficient basic infrastructure facilities like irregular power and water supply. Lack of Right Staff:Last but not the least SMEs are largely dependent on their staffs.Some of these hurdles comprise of inefficacy of SMEs to access continued development and success. if you fail in the recruitment process. bad road and railway connectivity etc are some of the factors that are hampering the growth of SMEs in India.

online promotions and online advertisements to get rid of these shortcomings mentioned above.hire right employees. who give their best and support the enterprise through their performances. IndiaMART. .com and Hellotrade. some renowned companies like IndiaMART.com is doing this through a drive involving seminars. ICTs. By seeing the growing obstacles in the way of SMEs. events and one to one commitments to illuminate the SME entrepreneurs.com are taking initiatives to aware the SMEs about online presence.

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