Contribution of Indian SMEs to GDP Expected to Rise by 2012

A survey was conducted by ASSOCHAM in 2009 concerning the contribution of Small and Medium Enterprises (SMEs) to Gross Domestic Product (GDP) in India. It was revealed that the contribution towards the GDP is expected to rise to 22 percent by 2012. Their contribution to GDP was about 17 percent in 2009. The reason for this would be the technological upgradation and further increase in production.

It was studied that more than 60% of the SMEs had been using advanced technology. This would help in increase in production with low input costs. The other reason for the growth is liberalization and deregulation. The estimation of study reported that the growth rate of SMEs was 35 percent at the time of 2007. It is expected to grow at the rate of 40% in the next five years. The contribution of SMEs to the exports of the country was found to be 40% in 2009. It was estimated by the survey that the contribution to exports would rise to 44% by 2012.

Non-availability of credit facilities and high interest rates were found to be major problems for SMEs. Absence of skilled manpower, improper implementation of labor laws, and lack of adequate market information are also some of the problems accounted by SMEs. An absence of well researched database concerning market intelligence or technology is another issue that is being faced by the SMEs.

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