Each Sector Can Help SMEs Grow 

07-Sep-2016 10:21 am 0

Every nation needs small and medium enterprises because of the way they contribute extensively to the overall economic development. SMEs bring about employment opportunities, help in wealth distribution, promote entrepreneurs and increase the production of major goods, thus making connections among different industries stronger. The agricultural sector is the strongest backbone for industrial growth which majorly consists of SMEs that always promote local technologies and increase the use of local raw materials.

Problems and solutions

Though the government has always supported the development of manufacturing business industries, it is yet to provide suppliers, financing, and specialized services as well as create an environment where competition and cooperation allow the manufacturers to enhance their efficiency over the years. These are some of the main issues affecting the growth of SMEs and they need to be handled appropriately even if policies need to be changed for this reason.

Moreover, the poor power supply has always been a major issue because most SMEs machinery in the rural areas tends to lie idle for more than 10 hours per day, thus increasing the whole cost and reducing the growth. Though power for farmers has recently been subsidized, the electricity costs for SMEs can still be considered as high. To make it worse, the Tax Bill of goods and services hasn’t been seen for a long while.

The growth of SMEs can be achieved through empowerment. Most SMEs tend to avoid the use of technology for various reasons, which include no capital and expertise to train them. However, such issues can be solved by the ministry in charge of micro SMEs through adopting easy norms along with incentives that can be invest in technology ventures for alternate means of resources, such as private equity, venture capital, and investment funds.

Traditionally, registered micro SMEs have always focused more on the manufacturing sector. According to the ministry of the micro SMEs annual report for 2015-2016, these manufacturing businesses constituted most of the registered micro SMEs in the country. Moreover, SMEs from the service sector were responsible for about 17%.

However, this mix does not appear much good when analyzed from the view of India’s entire economy where the industrial sector accounts for just about 26% of the national GDP while the services have 57%. The representation of service businesses regarding SMEs is quite poor and there can be room for major improvement.


Many programs in India are now providing the much-needed policies, thus translating the vision into reality. These programs still need the sustained efforts of major stakeholders, including the government and big enterprises.

Little to no exposure to new opportunities and technologies has limited most of the growth of SMEs in different areas, like wastewater treatment, rural healthcare, agro-industries, clean energy, and so on. The lack of attention from the government for developing and framing a plan to boost the growth of SMEs in these areas has somewhat ceased.


Article Name
Each Sector Can Help SMEs Grow 
Every nation needs small and medium enterprises because of the way they contribute extensively to the overall economic development.

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