1.

Introduction and Methodology

Aim of the Report India is fastest growing economy of the world and is emerging as a prominent business hub of the world. The growth of Indian economy has been driven by rapid progress in industry and services, which have been marked by the presence of small and medium sized enterprises. The SMEs have recorded significant growth in numbers, size as well as output in last few years. The SME segment is marked by distinct characteristics from other large companies with separate government policies and rules being formed to encourage the growth of this segment. Hence, we at Vijya Research & Advisory have decided to come out with one such reference document on Small and Medium Enterprises which lays out an entire description of this sector. Data Interpretation & Reporting Level This report is a compilation of data from different secondary resources which span across central data sources, statistics available at state level, reports and books from independent research bodies and multilateral organisation and news related to the industry. The data collected is processed and analysed to present the most interesting and useful aspects of the statistics to the readers. Our experts working on sectors perform due diligence in bringing out true facts. Time series data is also used to analyse the performance over the time. Scope of Study Defining the scope of the report is essential but also difficult at the same time. Considering the limit of the pages and words we have tried to incorporate as filtered and crisp information as possible. We have also tried to include diverse aspects of market and business dynamics. However yet there were many things which were out of the scope of the project. Detailed state level assessment of the SMEs is possible yet was considered out of the scope of this project and hence was restricted to a crisp overview. Similarly each chapter can itself take shape of a report in itself if in-depth study is required.

Contents 1. 2. 3. Introduction and Methodology Overview SME sector in India

Sector definition Size of SME sector 4. 5. 6. 7. 8. 9. 10. 11. 12. Key sectors in MSME Important SME clusters in India Government Role in MSME Sector Challenges faced by SMEs SWOT analysis of SMEs Recent Developments Growth Outlook for the sector Important bodies/institutions for MSME sector in India Annexure

List of Tables Table 2 1: Investment in plant and machinery/ equipment (excluding land and building) Table 2 2: Size of the Registered MSME Units in India Table 2 3: Nature of Activity of MSMEs Table 2 4: Employment in MSME sector Table 2 5: International scenario of SME sector Table 3 1: Top industries in MSME sector by value of gross output Table 3 2: Industry Group wise distribution of registered and unregistered enterprises Table 7 1: SWOT analysis of SMEs Table 11 1: Overall SSI performance over the time Table 11 2: Growth rates of SSI sector Table 11 3: Share of micro, small & medium enterprises in total exports Table 11 4: Exports Of Major Products of MSME Sector Table 11 5: SME clusters in India

List of Figures Figure 1: Contribution of MSMEs in Industry and GDP of India Figure 2: Distribution of MSMEs by type of organization

Report Overview Around the globe, SMEs have played an important role in boosting economic activity and creating employment for the skilled as well as unskilled labour. Indian economy is no exception as small and medium enterprises have contributed substantially to the growth. The SME sector in India is defines on basis of investment in equipments, plant and machinery made by an enterprise, the limit for which differs between manufacturing sector and services sector. The definition for SME segment officially includes micro, small and medium enterprises and thus MSME is used in India. There are around 105 lakh SME units in India currently which employs 3 crore people with investment of Rs. 1.54 lakh crore. The sector has grown at an average rate of 11 percent during last four years. It contributes 40 % to industrial production and 6% to GDP (2003-04). The SME sector in India is largely falls under unregistered segment category due to the small size of the units. Manufacturing segment dominates most of the SME sector in terms of number of enterprises. Partnership is the most common form of organization in small and medium enterprises with a small section of the business units opting for registering as private company. While the government at central level and at state levels has taken measures to ensure SME development take place at rapid pace, yet SME face significant amount of challenges in growing big as well as in meeting competition at international level. The sector enjoys considerable government benefits with well focus and thrust being routed to the sector which is seen as an important contributor to the economic growth and significant factor in nurturing entrepreneurial talent in the country.