A survey carried out by the Associated Chambers of Commerce and Industry of India (ASSOCHAM) says that the contribution of SMEs to the country’s GDP will rise up to 22% by 2012 from the current 17%.

Technological upgradation undertaken by the SMEs is one of the key factors for this expected rise. The survey also says that more than 60% of the SMEs are using advanced technology that will not only help to increase production but will also bring down input costs.

Another major factor contributing towards such a growth is liberalisation and deregulation. It also says that SMEs have grown at a rate of 35% in the last 2 years and is likely to grow at the rate of 40% in the next 5 years. The sector’s contribution to the country’s exports is likely to go up to 44% from the current 40%.

The study also listed the major problems faced by the SMEs – non-availability of credit facilities and high interest rates. Other problems include lack of adequate market information, absence of skilled manpower and improper implementation of labour laws are some of the growth-impeding factors for the SME sector.   

Another factor concerning SMEs in India is the fact that most of them do not have access to well researched database regarding market intelligence or technology, which needs to be provided to them on a regular basis.