The often quoted line, that small and medium enterprises (SMEs) are the backbone of the Indian economy, is not mere rhetoric but is clearly supported by facts that highlight the sector’s contribution to the economy.
According to the Ministry of Micro, Small and Medium Enterprises, SMEs contribute around 9 per cent to India’s GDP, accounting for as much as 30 per cent of India’s total exports and 45 per cent of the country’s manufacturing output. The SME sector employs over 100 million people who are engaged in activities across industries.
From traditional handicrafts to manufacturing and services to high value-add sectors employing technology, SMEs are fuelling India’s growth engine. In August 2016, the Union Minister for Commerce, Nirmala Sitharaman, asked the RBI to cut interest rates by 2 per cent in order to boost the SME sector and help create jobs. This came in for a fair amount of criticism and debate but the underlying message was clear — allow the sector to grow and become a larger stakeholder in India’s growth.
For more on this story visit the following link: Giving SMEs access to funding
Source: Business Line