IMPORTANCE AND CONTRIBUTION OF SMES IN INDIA
Importance of SMEs
The importance of small and medium enterprises is well understood by national economies. World over half to two- thirds of all businesses are SMEs and in many regions this proportion is much higher. SMEs are capable of creating jobs with least amount of capital and in dispersed locations which makes SMEs attractive to policy makers. However they remain as a heterogeneous group, in different organizational structures ranging from proprietorship to corporate, engages in factories to service organizations activities and with different definition in different countries and in some countries they differ from industry to industry.
Contribution of SMEs
The contribution of individual SMEs are small but collectively they have emerged as a dominant player in the national economies. The importance of Small and Medium Enterprises in India is due to the maximum number of units and its employment opportunities. This sector plays a significant role in the development and employment to minorities, backward class people and also to women. Annual report of Ministry of MSME (2010-11) show that, in terms of value, the sector accounts for about 45 per cent of the manufacturing output and 40 per cent of the total exports of the country. The sector is estimated to employ about 59 million people in over 26 million units throughout the country.