SME Sector in India: A New Agenda

Abstract

Going global India emphasized the need for accelerating the development of small and medium enterprises (SME). The target articulated in the preamble of the Small and Medium Enterprises Development Bill, 2005 affirms "to provide for facilitating the promotion and development and enhancing the competitiveness of small and medium enterprises.". As an imperative pushed to the top of a new agenda the phrase "enhancing the competitiveness" assumed a level- playing field for Indian SMEs : "to be internationally competitive even to survive in the domestic markets". As in the past the SME Sector is expected to stimulate employment opportunities, particular self-employment. But this primacy is put in the context of gains India sees in software and manufacturing. From this point of view the potential of the SME sector has started to be recognized as "entrepreneurial growth engine" in the new technology areas, export sectors and modern subcontracting practices. This paper seeks to review the position of the SME Sector, as nowadays, following two approaches. One will trace its composition, structural changes and growth performance as designed through the policy measures implemented by the Government in the 1990-s. The other will be focused on the impact of entrepreneurial development programmes (EDPs) on promotion and modelling entrepreneurship in the SME sector. The paper is based on data-sources and publications which the author had an opportunity to study during her stay at the EDII as a research fellow in 2005.