Indian SMEs Continue To Battle The State of Flux

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Recently, Greyhound Knowledge Group in association with Firstbiz commissioned a survey across 540 small and medium enterprises (SMEs) in 9 cities. In light of the Budget 2014-15, our aim, through this survey, was to accentuate the pressing concerns of the SME sector.

In the last five years, Small and Medium Enterprises have grown from 39 million in 2008 to 48 million in 2013. In addition, SMEs employ over 60 million people and create 1.3 million jobs every year. This exponential growth brings along certain challenges which need to be tackled. The survey dwells deeper into the challenges faced and highlights the expectations of the SME sector with the maiden NDA government budget. Based on the survey, below are some key insights:

  • Focus on fund raising will be beneficial for SMEs, especially in tier 2 and tier 3 cities. Since most SMEs start out on a minimal capital, requirement for funds arises in no time. Low funds hinder retention of skilled workers, marketing of products and innovation in R&D. SMEs, as a result, have low productivity.
  • Combination of incentives for entrepreneurs and labour protection laws will increase overall output of SMEs. If the budget addresses laws for protection of low skilled labour, SMEs will foster the inflow of people into the sector. Once labour can be retained, entrepreneurs can expand business with given incentives.
  • SMEs have to buckle up and learn skills for maximum utilization of technology. In today’s date, technology is used in every field. With access to technology comes knowledge of utilising it as per the business. It is essential for SMEs to adopt technology to be at par with their bigger competitors.
  • Standardisation in regulation of SMEs is need of the hour. Bygone laws, unfavourable tax regime and rules and regulations make it difficult for start ups to excel. Transparency in bookkeeping and a common regulatory body for registration procedures will lay foundations for standardisation in the sector.
  • Last but not the least, awareness of government initiatives is crucial. Over the past few years, the government has introduced and implemented various schemes to assist SMEs. A thorough knowledge of such scheme will be favourable. SMEs need to take the aggressive approach with banks to reap benefits.

SMEs are the undisputed powerhouse of India. To keep the fire burning, SMEs have to utilise all its resources for better productivity. While the Union Budget 2014-15 has done well to promote the interest of this sector, it remains to be seen how many will eventually gain from the proposed schemes.

If you are an SME or have interest in learning more about them, please contact our Client Centricity team and they’ll be in touch.

Thanks again for your interest in the SME report. We at Greyhound Knowledge Group are happy to take any follow-up questions that you might have. Please reach out to us on

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About The Author: Sanchit Vir Gogia is the Chief Analyst & CEO of Greyhound Research, an independent IT & Telecom Research & Advisory firm. He also serves as Founder & CEO of Greyhound Knowledge Group that operates under four brands – Greyhound Research, Greyhound Sculpt, Greyhound Technocrat and Greyhound Vivo. To read more about him, click here.