INDEX

1. Introduction
2. Emergence of MSME
3. Overview of types
4. Types of MSME (micro , small & medium)
5. Characteristics
6. Role of MSME
7. Problems
8. Suggestions
9. Contributions
10.Bar chart and pie chart
11.MSME clips from all over India
 INTRODUCTION

Small & medium Enterprises

are the back bone of Industrial
Development.
Ministry of Micro Small &
Medium Enterprises Contributes
Nearly 8% in GDP, 40% in
Manufacturing output & 45% in
Exports.
They provides the largest share
of employment after agriculture
They have emerged as a
dynamic and vibrant sector of
economy.
 INTRODUCTION

They are widely

dispersed across the
country and produces a
diverse range of
product and service.
It helps in the growth of
a country
They are the nursery for
entrepreneurship and
innovation
EMERGENCE OF MSME
Based on Ghandhi model
Encouraged by MSME act 2006
During pre liberalization before
1991 India adopted Industrial
policy resolution 1948 that
defined the role of state in
industrial development for the
first time
At that time India accorded
high priority to small and
medium enterprises
Despite numerous protection
and policy measures MSME has
remained mostly small &
technologically backward
 The scenario of small scale
sector changed with
industrial policy
establishment in 1991
Liberalization came into
existence
It was the post liberalization
era (1991 to 2006)
This reflected the growth of
SSIs
In 1991 the growth rate of
SSI was almost 3 times of
the total industrial sector
from 1992 to 1995
However in 1995 the growth
rate was slightly lower but
again it increased in 1996
 Micro, Small and Medium Enterprises
Development Act, 2006

Salient features

Industry replaced by enterprise which include

service enterprises also.
Ambit of sector enlarged to cover medium
enterprises.
Constitution of MSME Board.
Simplification of registration procedure.
Progressive credit support.
Penalty for delayed payments.
Provision for exit policy.
 What they actually are?
The commonly used criteria at the international
level to define SMEs are the number of
employees, total net assets, sales and investment
level.

The European Union makes a general distinction

between self-employment, micro,small and
medium sized businesses based on the following
Employees
criteria:
0 Self-employed
2-9 Micro business
10-49 Small business
50-249 Medium-size business
In the Indian context, micro, small and
medium enterprises are defined as..
It is based on the investment investment in plant and
machinery (for manufacturing enterprise) and on
equipments for enterprises providing or rendering services.

In case of manufacturing sector-

Micro enterprise-investment does not exceed 25 lakh
rupees.

Medium enterprise- more than five crores but not upto ten
crores.

Small enterprise- more than 25 lakhs rupees but doe not

exceed 5 crores.
 In case of services-

a micro enterprise- not upto 10 lakh

rupees.

a small enterprise- more than 10 lakh but

not upto 2 crore rupees.

a medium enterprise- more than 2 crores

but not upto 5 crores.
OVERVIEW OF TYPES
MANUFACTURING ENTERPRISES

MICRO ENTERPRISE
Micro enterprise generally refers to a
small business employing 10 people
or less
It is an enterprise in which
investments in plant and machinery
is between 5lakh to 25 lakh.
These enterprises works and
operates not by choice but out of
necessity
SMALL ENTERPRISE

Small enterprise generally refers to a business

employing 50 persons or less

It is an enterprise in which investments in plant

and machinery is between 25 lakh to 5 crores.

These enterprise works and operates to earn a

small amount of profit.
MEDIUM ENTERPRISE
Medium enterprise refers to a business
employing maximum to 250 employees

It is an enterprise in which investment in

plant and machinery is between 5 crores to
10 crores

These enterprises works and operates to

earn a fair amount of profits to increase their
standard of living.
 SERVICE ENTERPRISES
MICRO ENTERPRISE
An enterprise in which investment in
plant and machinery is up to 10 lakhs
SMALL ENTERPRISE
An enterprise in which investment in
plant and machinery is from 10 lakhs to
2 crores
MEDIUM ENTERPRISE
An enterprise in which investment in
plant and machinery is from 2crores to 5
crores.
 Institutional Support Structure
for MSMEs in India
At Federal Level
At State Level
1. Ministry of
MSMEs 1. Directorate of
Industries
2. Small
Industries 2. District
MSMEs
Development Industries
Organisation Centres
(SIDO) 3. State Finance
3. National Small Corporation
Industries 4. State
Corporation(NS Others Industrial
IC) 1. Industry Development
4. Khadi & Village Associations Corporation
Industries 2. NGOs 5. Technical
Commission(KV Consultancy
IC) 3. Banks/Finan
Organisations
cial
5. Coir Board Institutions 6. Entrepreneur
6. Entrepreneurs ship
MAJOR SCHEMES
FOR
MSMEs SUPPORT
 Credit Support

1. Public sector banks advised to double the

flow of credit to MSMEs within 5 years
(20% annual growth)
2. A minimum of 40% of bank credit
earmarked for priority sector lending
which includes loans to MSEs
3. Specialised SME Bank branches in
industrial clusters for smooth flow of
credit to MSMEs
4. One Time Settlement (OTS) scheme for
settling NPAs of MSMEs
 Technological Support
Credit Linked Capital Subsidy Scheme for
Technology Upgradation

Scheme meant to improve quality

of products by technology
upgradation.

Investment upto INR 10 million

(US$ 250,000) eligible for support
with subsidy upto 15% on
investment.
 Contd.

Testing Centres for Quality Certification

Tool Rooms and Training Centres for skill

upgradation

Incentive scheme for obtaining ISO

Certification by MSEs
 Marketing Assistance and Export
Promotion
1. Support for participation in trade fairs and
exhibitions national as well as international.

2. Training programmes on packaging for exports.

3. Purchase preference in Government

procurement.

4. Market Development Assistance Scheme for

publicity, market studies and adoption of
modern market practices
 Cluster Development
Programme

Cluster formation has been considered important

for MSME development. A cluster may be defined
as a local agglomeration of enterprises (mainly
SMEs, but often also some large enterprises),
which are producing and selling a range of related
and complementary products and services.
 International Cooperation Programme

Provides exposure to MSMEs to the latest

technologies, manufacturing practices prevalent in
their fields in different countries.

Encourages their participation in international

exhibitions for exports.
 ROLE OF MSMES IN INDIA

EMPLOYMENT GENERATION
PRODUCTION
EXPORT CONTRIBUTION
UTILISING RESOURCE OPTIMALLY
INCREASE GDP
 PROBLEMS OF MSMEs

Financial Problem-
Credit facility only up
to 30%
Raw material improper
Technological problem
Less Advertisement
Managerial problem of
MSME
 Challenges before MSMEs
Problem of skilled manpower.
Inadequate credit assistance.
Irregular supply of raw material.
Absence of organised marketing.
Lack of machinery and equipment.
Absence of adequate infrastructure.
Competition from large-scale units and
imported articles.
Other problems like poor project planning,
managerial inadequacies, old and orthodox
designs, high degree of obsolescence and
huge number of bogus concerns etc.
SUGGESTIONS FOR IMPROVEMENT

Supply of technology
Conduct of survey
Awareness creation
Involvement of stakeholders
Venture capital
Interaction with research and
development sector
Incrimination vehicle
CONTRIBUTION & PERFORMANCE OF
MSMEs
13 Million
MSMEs
producing more
than 8000
Products

45 % Industrial
production MSMEs 10 % Exports

31 Million
Employment
Leading banks providing loans to
MSMEs
EMPLOYMENT IN MSMEs SECTOR
EMPLOYMENT
800 695.40
732.24
695.38
700 595.66
626.34

600
500
400
300
200
100
0
2009-10 2010-11 2011-12 2012-13 2013-14

YEA
R
NUMBER OF EMPLYOMENT
GENERATION IN MSME

2009-10
MEDIUM MICRO SMALL

7%
24%

69%
 SECTOR OF MSME
This chart shows the percentage of types of MSME enterprises
13% enterprises are engaged in service sector and 87 % enterprises are engaged in manufacturing sector

13%
SERVICE
MANUFACTURING

87%
MSMEs CLIPS..
Manipur handicraft factory..
RUGS FACTORY- JAIPUR
BANGELS FACTORY
Paper Mache small enterprise