MSME sector has often been termed as the ‘engine of growth’ for developing economies like India. Based on official figures from the Ministry of MSME, Nov.08, MSME contributes 8% of National GDP, 45% of India’s total industrial employment, 95% of all industrial units and comprises 50% of India’s total manufactured exports. The SME sector in India has been changing over time, generally by the changes in policy of government. Despite its relevance, the MSME sector has been extensively facing various obstacles in growth. In recognition of these difficulties and problems to a long sustained lobbying, the GOI passed the MSME Development Act 2006 which brought about major changes in this sector. The basic achievement through that act was a clear and decisive definition of units that fall under Micro, Small and Medium category. These definitions are based on total investment required in plant and machinery for manufacturing units and required investment in equipments for service units. The new definitions have expanded the plant and machinery limits and now each enterprise level includes larger investments than before. An allowance for smaller investments in service enterprises has also been included in the scheme. The MSME has extensively helping in the development of SME through entrepreneurship development in India.
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