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Small and medium enterprises orsmall and medium-sized

enterprises (also: Small and Medium-sized Enterprises; acronym in

the plural: SMEs; small and medium businesses orsmall andmedium-sized businesses, acronym: SMBs; and variations thereof) are

companies whose headcount orturnoverfalls below certain limits.

The abbreviation "SME" occurs commonly in the European Union and

in international organizations, such as the World Bank, the United

Nations, and the WTO. The term "small and medium businesses" or

"SMBs" is predominantly used in the USA.

In most economies, smaller enterprises are much greater in number thanlarge companies. SMEs are often said to be responsible for driving

innovation and competition in many economic sectors

India

In India,

i. A micro enterprise is an enterprise where investment in plant and

machinery [original cost excluding land and building and the itemsspecified by the Ministry of Small Scale Industries vide its notification

No. S.O. 1722(E) dated October 5, 2006 does not exceed Rs. 25 lakh;

ii. A small enterprise is an enterprise where the investment in plant and

machinery [original cost excluding land and building and the items

specified by the Ministry of Small Scale Industries vide its notification

No. S.O. 1722(E) dated October 5, 2006] is more than Rs.25 lakh but

does not exceed Rs.5 crore; and

iii. A medium enterprise is an enterprise where the investment in plant

and machinery (original cost excluding land and building and the items

specified by the Ministry of Small Scale Industries vide its notification

http://en.wikipedia.org/wiki/Company_(law)http://en.wikipedia.org/wiki/Turnover_(employment)http://en.wikipedia.org/wiki/European_Unionhttp://en.wikipedia.org/wiki/World_Bankhttp://en.wikipedia.org/wiki/United_Nationshttp://en.wikipedia.org/wiki/United_Nationshttp://en.wikipedia.org/wiki/WTOhttp://en.wikipedia.org/wiki/Indiahttp://en.wikipedia.org/wiki/Lakhhttp://en.wikipedia.org/wiki/Crorehttp://en.wikipedia.org/wiki/Turnover_(employment)http://en.wikipedia.org/wiki/European_Unionhttp://en.wikipedia.org/wiki/World_Bankhttp://en.wikipedia.org/wiki/United_Nationshttp://en.wikipedia.org/wiki/United_Nationshttp://en.wikipedia.org/wiki/WTOhttp://en.wikipedia.org/wiki/Indiahttp://en.wikipedia.org/wiki/Lakhhttp://en.wikipedia.org/wiki/Crorehttp://en.wikipedia.org/wiki/Company_(law)

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No. S.O. 1722(E) dated October 5, 2006) is more than Rs.5 crore but

does not exceed Rs.10 crore.

The definition of MSMEs under the services sector is as follows:

i. A micro enterprise is an enterprise where the investment in equipment

does not exceed Rs.10 lakh;

ii. A small enterprise is an enterprise where the investment in equipment

is more than Rs.10 lakh but does not exceed Rs.2 crore; and

iii. A medium enterprise is an enterprise where the investment in

equipment is more than Rs.2 crore but does not exceed Rs.5 crore.

The Indian Micro and Small Enterprises (MSEs) sector plays a pivotal

role in the overall industrial economy of the country. It is estimated that

in terms of value, the sector accounts for about 39% of the

manufacturing output and around 33% of the total export of the country.

Further, in recent years the MSE sector has consistently registered

higher growth rate compared to the overall industrial sector. The major

advantage of the sector is its employment potential at low capital cost.

As per available statistics, this sector employs an estimated 31 million

persons spread over 12.8 million enterprises and the labour intensity in

the MSE sector is estimated to be almost 4 times higher than the large

enterprises.[3]

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