SMEs 'Catch Them Young' To Reap The Benefits

SMEs are crucial for any economy. Especially, for a developing country like India, the SME sector serves as a growth engine. Shohini Nath finds out how the listed SME companies have performed on the bourses and reasons out why investing in SMEs cannot be ignored anymore. Read on...

- Shohini Nath

The global GDP growth is witnessing a slowdown and, according to the World Bank Group statistics, it is projected at 2.6 percent in 2019 which is below previous projections. However, it is expected to gradually rise to 2.7 percent by 2020. In comparison to global growth, India’s GDP growth is projected at 7.5 percent by 2020. India remains as one of the fastest growing economies even though the global economic problems such as rising trade barriers and the piling of government debt has been dampening the spirits, India is in a sweet spot. One of the major reasons that have helped India to retain its position and remain in the top 5 growing economies is the strong presence and major contribution of the micro, small and medium enterprises (MSMEs) to the GDP.

The structural definition of MSMEs might, however, differ across nations, but the common and accepted truth is that the MSMEs play a vital role in the growth and development of a country. MSMEs traditionally constitute the largest portion of the employment base and hire the biggest number of new employees. They produce a major chunk of a country’s goods and services, which in turn adds to the GDP of a country. The small and medium enterprises (SMEs) is a category placed between the micro-enterprises and large corporations.