SMEs Remain the Backbone Of Our Economy In the last few years, the SMEs have stood out as the key driver behind the economic development of the country.
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India is one of the fastest-growing economies in the world and by now we all know that India's small and medium enterprise (SME) has emerged as an important and dynamic sector of the country's economy. Not only that, in the last few years the SMEs have stood out as the key driver behind the economic development of the country.
As per reports, the number SMEs is estimated to be at 42.50 million, registered and unregistered together forming a staggering 95 per cent of the total industrial units in the country. The sector includes manufacturing, retailers, infrastructure, and many more. At 43 million, India has the second-largest number of SMEs in the world, edging close to China which has around 50 million.
Many reasons contribute toward this rapid growth of SMEs as the backbone of India.
Emerging new products and business
If we look at the historical data, we see how the SME had limited products and services to provide to the customers especially in tier II and III cities. But at a fast-growing pace, the sector is quickly adopting industry and business models. They are no more limited to just one service or products but coming up with multiple ones. This sector, if provided with the right support, has the potential to spread industrial growth throughout the country.
With the frequent expansion of services and products, most SMEs have paved the way for job opportunities for millions of people. This current pandemic has brought a threat to many SMEs and their workers. But as India gradually begins to ease the lockdown restrictions we will witness normality in the SMEs workplace soon.
Although the SME sector faces a lot of challenges yet their diversion towards everyday growth is appreciable. As per a government report, at present around 36 million SMEs are generating 80 million employment opportunities, contributing 8 per cent of the GDP, 45 per cent of total manufacturing output, and 40 per cent of the total exports from the country.
Acceptance Of Digitalization And Technology
The addition to technology and adoption towards digitalization has helped SMEs to achieve a better global reach. Right from their social media presence to the promotion of their business online has helped the sector in gaining more customers and revenue. This year, the sector witnessed a 60 per cent boost in business through mobile apps which means that SMEs have taken well to technology. The shift from offline to online has paved a new way to this business sector such as the recently introduced digital payment mode. From card payment to QR code, providing digital payments as an option to clients has significantly helped the small and medium-sized business owners to grow their business.
Industrialization Of Rural And Backward Areas
Not only urban cities, the small- and medium-sized industries have also contributed hugely to the growth of rural areas in India. Due to their presence and continuous adoption of new innovative ideas, various industries have been established in tier II and III of the country. In the backward areas, SMEs benefit the tribal people as they help to promote industries such as handloom, khadi, agriculture and tea, among others. This way, SMEs also helps in reducing regional disparities.
SMEs And the Millennial
The millennial is the chief wage earners in India with a 47 per cent share in the working-age population and are becoming major players in fuelling product and services demand. They are hugely contributing to the consumer base for all businesses. Hence, SMEs are opting to cater to this section which has a completely different mindset and opinion proving to be a big milestone for the SME industry.