Worldwide, the small and medium business (SMB) enterprises have been accepted as the engine of economic growth and for promoting equitable development. The major advantage of the sector is its employment potential at low capital cost. The labour intensity of the SMB sector is much higher than that of the large enterprises. The SMB constitute over 90% of total enterprises in most of the economies and are credited with generating the highest rates of employment growth and account for a major share of industrial production and exports. In India too, the SMBs play a pivotal role in the overall industrial economy of the country. In recent years the SMB sector has consistently registered higher growth rate compared to the overall industrial sector. With its agility and dynamism, the sector has shown admirable innovativeness and adaptability to survive the recent economic downturn and recession.
As per available statistics (4th Census of SMB Sector), this sector employs an estimated 59.7 million persons spread over 26.1 million enterprises. It is estimated that in terms of value, MSME sector accounts for about 45% of the manufacturing output and around 40% of the total export of the country
A significant proportion of all Indian businesses fall under the small, medium and emerging enterprises segments. Needless to say, any growth in the Indian economy will come only if these emerging enterprises businesses grow. Unfortunately, these are also the businesses that will face the brunt of the current economic crisis. Within this Catch-22 situation lies a great opportunity – that of becoming world class players and leaders of growth.
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