The Indian Prime Minister, Narendra Modi, launched his
‘Make in India’ campaign in September last year. He visualizes the
transformation of India as a global manufacturing hub. This project has been
rolled out with high expectations. But, it is not only the big corporates that
will expedite the ‘Make in India’ process. The innumerable SMEs present across
the country will also be significant contributors.
Contribution
of the SMEs
The role of SMEs in development of India’s economy cannot
be ignored. 45% of the industrial output is produced solely by SMEs. Their
manufacturing base is strong enough and thus they contribute for more than 42%
of exports from India. They produce over 8000 items in all.
40% of India’s workforce is associated with SMEs. They
have employed 73 million people across the country. Besides, 1 million jobs are
created by this industry on a yearly basis. As employment generation is a focus
of ‘Make in India’ campaign, SMEs will play a vital role.
Encouragement
from the government
The Centre is taking several measures to boost the SMEs.
It has asked all the public sector companies to acquire a minimum of 20% of
material from the SMEs. This will be effective for the companies from 1st
April 2015.The government had recognized 25 sectors for the ‘Make in India’
initiative. It later on added 5 more and SMEs is one of them.
Strength of
SMEs
SMEs help to enhance the growth and development at thegrassroots level. The key reasons why
SMEs will act as a catalyst in the ‘Make in India’ campaign are:
- These industries adapt to new technologies easily and are swift in their decision-making process.
- With cheap labor and diminished overhead costs, SMEs are able to perform better than the big companies.
- The investment needs of SMEs are low.
- The worth of services and goods produced by SMEs is more than 4 times its investment.
SMEs have about 31 million units in India. This is 90% of
the total industrial units in India. They account for 40% value addition in the
manufacturing sector. Besides, they comprise over 80% of the total number of
industrial set ups in the country.
Seeing their large volume and strengths, it is evident
that they will play a vital role in the ‘Make in India’ initiative. Being the backbone
of industrial development, SMEs are the best way to promote entrepreneurship
and thus boosting manufacturing in the country.
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