Why most small businesses always remain small?
05 Nov 2011
Why do most small and medium enterprises (SMEs) remain SMEs through their entire life?
India has been the talk of the world markets for quite a few years now for its economic growth. It hardly needs pointing out that SMEs play an extremely important role in driving growth for any economy, and India is no different.
India has more than 30 million SMEs employing more than 60 million people. Currently, SMEs contribute more than 20 per cent of the GDP. These numbers show just how important the segment is, especially for India.
Obviously, a growth spurt in the SME segment will boost growth of India's overall economy. However, most SMEs have remained SMEs through their entire life, which is a pressing issue if India has to sustain the economic growth in the coming two decades or so.
The two sides of the coin are the policymakers and the entrepreneurs themselves.
Policymakers are working hard to create reforms that may be suitable. However, a real thrust hasn't been given as yet to the SME segment. They are still busy tweaking the law to benefit only a few; even though they have done a commendable job in significantly opening up the economy in the last two decades.
