Micro , Small and Medium Enterprises

• A pillar of growth – An engine of growth

• Huge contribution towards economic growth and development

at regional, national and global level

• Have survived global recessions due to agility, dynamisms,

Innovativeness.

• 100 million jobs and 46 million units have opened up before

March 2016

• Main Industries have been textiles, IT, Food processing, Travel

and tourism, leather, Auto components and Pharmaceutical

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 Table for distinction between micro, small and medium
enterprises
Type of Number of Size of assets Annual sales
enterprise employees

Micro Less than 10 Less than INR Less than INR

5,00,000 5,00,000

Small Less than 50 Less than INR 150 Less than INR
Million 150 million

Medium Less than 300 Less than INR 750 Less than INR
million 750 million

Source: IFC (2010)- Micro medium and small Entreprises

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 MSMEs in manufacturing and service sector

Enterprises Micro Small Medium

Manufactu Up to INR 25 Between INR Between INR 5
ring Sector lakhs 25 lakhs and crore and INR
INR 5 crore 10 crore

Services Up to INR 10 Between INR 1- Between INR 2

Sector lakhs lakhs and INR 2 crore and INR 5
crore crore

Source: Government of India (2016)- MSME Annual Report

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 Micro , Small and Medium Enterprises - Funding
• Small Industries and development bank

• Commercial and State banks

• Rural and Urban Cooperative Banks

• Venture Capitalists and Foreign Investors

Govt taking Steps to Improve Performance

• Credit
• Marketing
• Infrastructure
• Technology
• Skill Development
• Taxation 4
 MSMEs- Contribution to Growth of Country
• Provide opportunities for self development as well as
employment especially in agricultural sector

• Very lucrative for agriculture sector

• Foreign companies wish to tie up due to cheap labour,

untapped markets, innovations, growing per capita income of
consumers, rising usage of communication technology

• Enhancement of GDP

• Balanced regional growth and promoting environmentally

sustainable development.

• Requires low capital to start 5

 MSMEs- Some facts
• MSME contributed

• 45 % in Manufacturing sector

• 40 % in Exports

• 69 % in employment sector

• Employed maximum number of people after agriculture

• Contribution to GDP more than agriculture – 8 %

• Promotes equitable distribution of income

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 MSMEs- Some facts
• Number Grown from 1.1 Cr in 2001-02 to 4.48 Cr in 2014-15

• Export about 7500 products

• 45 % in Manufacturing sector

• 40 % in Exports

• 69 % in employment sector

• Employed maximum number of people after agriculture

• Contribution to GDP more than agriculture – 8 %

• Promotes equitable distribution of income 7

 MSMEs- Points to Ponder
• EXIM bank has recommended Angel funds and Venture capital
to be made available to avoid insolvencies, bankruptcies

• Initiatives like Small Industrial Development Bank of India

(SIDBI), Credit Guarantee Fund Trust of Micro and Small
Enterprise CGFTMSE and Prime Minister’s Employment
Generation Program (PMEGP)

• Constitutes 80 % of industry and produces around 8,000

value products

• To generate 2.5 Million employment by 2021

• To develop strong R and D capabilities

• To increase numbers of MSMEs 8