In the last few decades, India has witnessed a revolution in the way SMEs have grown and evolved multi-fold times. The emergence of SMEs or Small and Medium Enterprises has greatly helped in giving the right thrust to Indian economy.  

SMEs in India are divided into 2 categories depending on the type of their operations, namely, Manufacturing SMEs and Service SMEs. They are also categorised based on their Investment and Turnover Size.

- Micro SMEs have an investment of less than Rs 1 crore and a turnover of less than Rs. 5 crore.

- Small SMEs have an investment of less than Rs 10 crores and a turnover of up to Rs 50 crores.

- Medium SMEs have an investment of less than Rs 20 crores and a turnover of up to Rs 100 crores. 

The last few years have been challenging for the SME sector as businesses across the nation were affected by the pandemic. However, the Government has been taking several steps to support SMEs in these testing times, due to which, they have come back stronger in the post-pandemic era. Now, let us see how the SME sector has become the force behind driving the dream of an Atmanirbhar Bharat!

1. Balance and Localisation

Metropolitan cities like Mumbai, Bengaluru, and Ahmedabad have been the pillars of India’s economic progress for many years. However, the rise of SMEs has led to the progress of regional locations across India as more and more entrepreneurs continue to start their own small-scale businesses in their own cities. This has resulted in the elimination of regional imbalance through equal distribution of resources. The SMEs are also acting as auxiliary units to bigger industries.

2. Generating Employment Avenues

The growth of the SME sector has contributed immensely to creating employment opportunities in rural India. According to studies, the number of people employed in SME industries is approximately four times higher when compared to other sectors. With increasing job opportunities, SMEs have also opened doors to enhancing vocational skills even in remote and rural locations.

3. Growth of the Manufacturing Sector

SMEs operate in both Service and Manufacturing domains but the majority of industries belong to the manufacturing domain. This is mainly because of the advancement of technology, modernization, and easy availability of SME financing options. The development of the manufacturing sector will further help in making India self-reliant.

4. Rise in Exports

As SMEs continue to thrive, India has become a hub for a variety of export-quality products and services. From engineering parts to leather and food-based products, the variety is endless. Exports significantly help in increasing profitability by a good margin, thus strengthening the Indian Economy further. Favourable Government Policies have also been the major reason why exports continue to grow year-on-year.

While SMEs have a conducive environment in India to grow, it is also important to focus on ensuring that these businesses get the right support and guidance from time to time. Maintaining high-quality standards will play a major role in sustaining the business in the long run. Also, new-age tools for networking and digitization like Yes Bank GlobalLinker will be a game-changer for SMEs who are looking to take their business to the next level. 

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