{"id":43577,"date":"2024-11-20T11:06:27","date_gmt":"2024-11-20T05:36:27","guid":{"rendered":"https:\/\/vajiramandravi.com\/current-affairs\/?p=43577"},"modified":"2025-05-06T03:49:15","modified_gmt":"2025-05-05T22:19:15","slug":"small-and-medium-enterprises-smes","status":"publish","type":"post","link":"https:\/\/vajiramandravi.com\/current-affairs\/small-and-medium-enterprises-smes\/","title":{"rendered":"Small and Medium Enterprises (SMEs)"},"content":{"rendered":"<h2><strong>What\u2019s in today\u2019s article?<\/strong><\/h2>\n<ul>\n<li>About SMEs<\/li>\n<li>Characteristics of SMEs<\/li>\n<li>Key Statistics<\/li>\n<li>Challenges<\/li>\n<li>Government Support<\/li>\n<li>News Summary<\/li>\n<\/ul>\n<h2><strong>About SMEs<\/strong><\/h2>\n<ul>\n<li>Small and medium enterprises (SMEs) in India are businesses that are categorized as small-scale industrial (SSI) or medium-scale industrial units.\u00a0<\/li>\n<li>They are a key part of the Indian economy and are classified based on their annual turnover and investment in equipment and plants.<\/li>\n<\/ul>\n<h2><strong>Characteristics of SMEs<\/strong><\/h2>\n<ul>\n<li><strong>Classification<\/strong>:\n<ul>\n<li><strong>Micro Enterprises<\/strong>: Investment up to \u20b91 crore and turnover up to \u20b95 crore.<\/li>\n<li><strong>Small Enterprises<\/strong>: Investment up to \u20b910 crore and turnover up to \u20b950 crore.<\/li>\n<li><strong>Medium Enterprises<\/strong>: Investment up to \u20b950 crore and turnover up to \u20b9250 crore.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Diverse Sectors<\/strong>:\n<ul>\n<li>Operate across manufacturing, retail, IT, textiles, and more.<\/li>\n<li>Significant role in rural industrialization.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Scalability<\/strong>:\n<ul>\n<li>SMEs often act as ancillary units, supplying to large industries while fostering entrepreneurship.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<h2><strong>Key Statistics<\/strong><\/h2>\n<ul>\n<li><strong>Contribution to GDP<\/strong>: SMEs contribute approximately <strong>30% to India\u2019s GDP<\/strong>.<\/li>\n<li><strong>Exports<\/strong>: Account for nearly <strong>48% of India&#8217;s total exports<\/strong>.<\/li>\n<li><strong>Employment<\/strong>: Provide employment to over <strong>110 million people<\/strong> across urban and rural areas.<\/li>\n<li><strong>Number of Enterprises<\/strong>: Over <strong>63 million<\/strong> registered SMEs operate in India.<\/li>\n<\/ul>\n<h2><strong>Challenges<\/strong><\/h2>\n<ul>\n<li><strong>Access to Finance<\/strong>: Limited funding options and high borrowing costs.<\/li>\n<li><strong>Technology Adoption<\/strong>: Low penetration of advanced technologies.<\/li>\n<li><strong>Regulatory Compliance<\/strong>: Complex procedures and frequent policy changes.<\/li>\n<li><strong>Global Competition<\/strong>: Difficulty competing with large-scale industries and international players.<\/li>\n<\/ul>\n<h2><strong>Government Support<\/strong><\/h2>\n<ul>\n<li><strong>Schemes and Initiatives<\/strong>:\n<ul>\n<li><strong>MSME Samadhan<\/strong>: Resolves payment issues.<\/li>\n<li><strong>Prime Minister\u2019s Employment Generation Programme (PMEGP)<\/strong>: Encourages entrepreneurship.<\/li>\n<li><strong>Credit Guarantee Fund Scheme for Micro and Small Enterprises (CGTMSE)<\/strong>: Offers collateral-free loans.<\/li>\n<li><strong>Production Linked Incentive (PLI) Scheme<\/strong>: Supports manufacturing SMEs.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Digital Platforms<\/strong>:\n<ul>\n<li><strong>Udyam Registration<\/strong>: Simplifies the registration process for SMEs.<\/li>\n<li><strong>TReDS (Trade Receivables Discounting System)<\/strong>: Improves cash flow management.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<h2><strong>News Summary<\/strong><\/h2>\n<ul>\n<li>The Securities and Exchange Board of India (SEBI) has proposed new guidelines to make Small and Medium Enterprise (SME) Initial Public Offerings (IPOs) safer for investors.<\/li>\n<li>The changes aim to enhance compliance, reduce risks, and improve transparency in the SME IPO segment, which has seen increased retail participation in recent years.<\/li>\n<li><strong>Key Proposals:<\/strong><\/li>\n<\/ul>\n<figure class=\"image image_resized\"><img decoding=\"async\" src=\"https:\/\/vajiram-prod.s3.ap-south-1.amazonaws.com\/SEBI_Guidelines_for_SM_Es_ab79ba41e6.webp\" alt=\"SEBI Guidelines for SMEs.webp\" \/><\/figure>\n<ul>\n<li><strong>Minimum IPO Size<\/strong>: Introduction of a minimum IPO size of \u20b910 crore, replacing the current scenario where no minimum is mandated.<\/li>\n<li><strong>Hike in Application Size<\/strong>: Increase in the minimum IPO application size to \u20b94 lakh, from the current \u20b91 lakh.<\/li>\n<li><strong>Promoter Restrictions<\/strong>: Limit the sale of promoter shares to 20% of the issue size during the IPO.<\/li>\n<li><strong>Profitability Requirement<\/strong>: SMEs must show a minimum operating profit of \u20b93 crore in two out of the three years prior to filing IPO papers.<\/li>\n<li><strong>Disclosure and Monitoring<\/strong>:\n<ul>\n<li>IPO offer documents must be made public for at least 21 days before listing.<\/li>\n<li>A compliance monitoring agency will oversee the utilization of funds raised through IPOs.<\/li>\n<li>SMEs must disclose quarterly results and shareholding patterns, similar to larger listed companies.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Rationale Behind the Changes:<\/strong>\n<ul>\n<li>These measures follow concerns over inflated valuations, fund misutilization, and investor losses in the SME segment.<\/li>\n<li>SEBI&#8217;s proposals aim to safeguard smaller retail investors and ensure the SME market remains healthy and trustworthy.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<hr \/>\n<h3><strong>Q1. When was the Ministry of Skill Development established?<\/strong><\/h3>\n<p>The Ministry of Skill Development and Entrepreneurship is a ministry of the Government of India which came into existence on 9 November 2014 and gazetted on 8 December 2014.<\/p>\n<h3><strong>Q2. What is SEBI\u2019s objective?<\/strong><\/h3>\n<p>The Securities and Exchange Board of India (SEBI) was established in 1992 to protect investors&#8217; interests, regulate the securities market, and promote its development.<\/p>\n<p><strong>News:<\/strong> <a href=\"https:\/\/timesofindia.indiatimes.com\/business\/india-business\/sebi-moots-tighter-sme-ipo-rules-to-lower-investor-risks\/articleshow\/115468069.cms\" target=\"_blank\" rel=\"nofollow noopener\">Explained | Small and Medium Enterprises (SMEs)<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>SMEs are businesses that are categorized as small-scale industrial or medium-scale industrial units.<\/p>\n","protected":false},"author":5,"featured_media":43578,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[18],"tags":[],"class_list":{"0":"post-43577","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-upsc-mains-current-affairs","8":"no-featured-image-padding"},"acf":[],"_links":{"self":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/43577","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/users\/5"}],"replies":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/comments?post=43577"}],"version-history":[{"count":0,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/43577\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media\/43578"}],"wp:attachment":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media?parent=43577"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/categories?post=43577"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/tags?post=43577"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}