ED/U3 Topic 1 Definition of small scale as per MSMED act 2006, Rationale, Objectives, Scope
Definition of small scale as per MSMED act 2006
A small enterprise is an enterprise where the investment in plant and machinery is more than Rs. 25 lakh but does not exceed Rs. 5 crore.
- Promoting competitiveness and productivity in the MSME space.
- Making the MSME sector innovative, improving technology and depth.
- Enabling environment for promotion and development of MSMEs.
- Strong presence in exports.
- Improved managerial processes in MSMEs.
Reasons behind growth in SME business
There are various reasons due to which the small scale business in India has witnessed a spurt of growth. Some of these factors are:
• High contribution to domestic production
• Low investment requirements
• Significant export earnings
• Capacities to develop appropriate indigenous technology
• Operational flexibility
• Contribution towards defense production
• Technology – oriented industries
• Import substitution
• Location wise mobility
• Low intensive imports
• Competitiveness in the domestic market
• Competitiveness in the export markets
The India small business opportunity is getting quite exciting and innovative with the passing of every year. There are a lot of retail business ideas for entrepreneurs who are interested to set up a SME business in India. However, investors planning to invest in this sector must ensure that they make a wide choice and use the resources available in the right way to reap the benefits.