SMALL AND MEDIUM ENTERPRISES (SMEs) IN INDIA

SME ?

In accordance with (MSMED) Act, 2006 (MSME)are classified in two Classes: (a) Manufacturing Enterprises
(b) Service Enterprises

SME Cluster

cluster may be defined as a local agglomeration of enterprises example :-leather industry

Type of clusters

based on stage of development

'Initial phase' 'Growth phase 'Maturity phase' and 'Extinction

Based on relationship of units within the clusters

Horizontal clusters
Large Unit Based Vertically integrated clusters

Mixed character

Whether cluster formation is an induced phenomenon?

S.No
1 2

Type of Cluster
Natural Induced

No. of Clusters
125 13

Total

138

Factors that led to the cluster development

Resources
market infrastructure

Classification of Clusters according to their primary lead factor

S.No Basis of Cluster No.of Clusters 1 Resource Based 33 2 Market Based 99 3 Infrastructure Based 6 Total 138

Reservation policy and clusters

S.No. Product Category 1. Reserved for SSI 2 Unreserved Total

No. of Clusters 74 64 138

Performance of SME Clusters in India

Exports from SSI

directly to 35%
indirectly to 15%

major items of exports

Hosiery and Garments

Leather and leather products Diamonds

Gems & Jewelry

Productivity

high scope for improvement

reasons use of traditional tools old techniques outdated technology poor labor productivity bottlenecks of infrastructure

Employment generation

Policies & Laws Relating to SME Clusters

supportive of clusters through its general framework

support has especially been available in their growth stage Examples:- a bourse was established at Surat for trading in diamonds - 'National Institutes of Fashion Technology' (NIFT ) -'Footwear Design & Development Centers'

Industrial Education & Labor Training

5,000 science and technology related institutions . Despite several institutions of the government, there is a strongly felt need for relevant practical training for the existing entrepreneurs, labor and supervisors.

Infrastructure

'StateIndustrialDevelopmentCorporations For the other infrastructure facilities within the industrial estates, entrepreneurs have to approach different agencies for electric power, water supply and telephone connection.

financial institutions
At national level there are 8 institutions that mainly cater to the needs of medium and large scale sector. most important among them are :- Industrial Development Bank of India (IDBI), - Industrial Finance Corporation of India (IFCI) - Industrial Credit & Investment Corporation of India (ICICI).

Special financial institutions for SMEs - 'Small Industries Development Bank of

India' (SIDBI ) -'State Financial Corporations' (SFCs) -'State Industrial Development Corporations' (SIDCs)

Special institutions for the export promotion

Government has established 'Export Promotion Councils' for the products with high potential of exports.
Indian Trade Promotion Organization

Policy Package for Micro, Small and Medium Enterprises in Rajasthan