Small enterprises to contribute 22 percent of GDP

September 28th, 2008 - 8:06 pm ICT by IANS  

New Delhi, Sep 28 (IANS) The share of small and medium enterprises (SMEs) in India’s gross domestic product (GDP) is likely to go up to 22 percent by 2012, according to an industry lobby report, released here Sunday. The Associated Chambers of Commerce and Industry of India (Assocham) said in the study that the SME sector was upgrading itself technologically.

“Technological upgradation will reduce input costs and increase production, which will enable SMEs to contribute 22 percent to India’s GDP against 17 percent by 2012,” it said.

The study, ‘SMEs-Tomorrow’s Blue Chips’, said SMEs, which grew at 35 percent over the last two years, would register 40 percent growth driven by technological upgradation.

Assocham president Sajjan Jindal said the share of SMEs to the national exports would be up to 44 percent from 38 percent in the next five years.

He said over 3.2 million SME units were spread across the country, producing around 7,500 items and providing employment to nearly 400 million people.

He, however, said the government should look into the problems small and medium units face in getting credit from the public banks and financial institutions.

“SMEs are still neglected by banks and financial institutions, mostly in the private sector domain. The public sector banks in India are the only hopes for SMEs,” Jindal said.

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